While the month of December is off to one of its best starts ever for equities, this week has gotten off to a quiet start. If history is any guide, it may be a dull week. The charts below highlight the average daily change for the DJIA in the month of December since 1980 as well as the percentage of time that each day is positive. Including today, the DJIA has only average positive returns in one of the next eight trading days. Furthermore, of those eight trading days, there are only two where the index has averaged positive returns more than half the time.
While any subpar returns in the next week or two are likely to cause some to questions the chances of a Santa Claus rally, based on the last thirty year, the bulls get back to business towards the second half of the month. During the last eleven trading days of the month, the DJIA has only average negative returns on three days. The best day of the month historically has been the 15th trading day of the month (12/21 this year) where the DJIA averages a gain of 0.50% with positive returns 70% of the time.
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Disclosure: No position