The Santa Claus rally is coming to an end on Wall Street

The Santa Claus rally is coming to an end on Wall Street

Santa's run on Wall Street is coming to an end and should leave investors feeling pretty jolly.

The last 5 sessions of a calendar year and the first two of the following year have seen the Dow Jones Industrial Average DJIA and the S&P 500 Index SPX hit all-time highs, helping the period live up to its billing as a seasonally bullish stretch for investors.

How good has it been so far?

The Dow's gain from December 27 through Tuesday morning sets the stage for a 2.5% Santa Claus rally, which would be its best advance since 2008-09 when the blue-chip index rallied by 6.3%. The index needs to hold above 2% during this Santa Claus rally to reach that mark.

The S&P 500 index was up 1.9% over the same stretch, which would represent its best Santa Claus rally since a 2% rise during the 2012 -- 13 period.

According to Dow Jones Market Data, the S&P 500 index, which started the Santa Claus rally on track for its best run since 2000 -- 01, has risen 1% since the Santa Claus rally, which is poised to be its best such rise since a 2.1% gain in 2018 -- 19.

Although a seemingly frivolously seasonal trend to follow, the Santa Claus rally, popular by Yale Hirsch, the founder of the Stock Trader s Almanac, now run by his son Jeff, has tended to lead to losses for the rest of January, as it did in 1999, 2005, 2008, 2015 and 2016.

Past performance isn't a guarantee of future performance and the statistical trends for the market post-Santa Claus rally are fairly thin.

MarketWatch columnist Mark Hulbert writes that the Santa Claus rally doesn't have a guarantee, even though it has statistics and theory on its side.