Santa Rally Home Stretch. Will He Or Won’t He Call? | SPX Market Briefing | 29 Dec 2025

We are officially in the Santa Rally home stretch.

Will we or won’t we “get one”?

It normally happens. But that’s not the main point – which seems to have been lost in the media hype.

The important part, according to Yale Hirsch who invented this thing back in 1972, is when it doesn’t happen.

“If Santa Claus should fail to call, bears may come to Broad and Wall.”

A failed Santa Rally tends to precede bear markets, or at least times when stocks could be purchased at lower prices later in the year. It’s not a trading strategy. It’s an indicator. A warning system.

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Market Briefing:

Current Multi-Market Status:

• SPX: ~6,929.95 (Near NATHs!) – Bull TnT – Bullish Above 6800.08, PFZ 6720.43, Target 6949.15

• RUT: 2,534.35 – Bear TnT – Bearish Below 2543.59, PFZ 2572.9, Target 2519.47

• ES: 6,963.25

• NQ: 25,750.75

• YM: 48,997

• RTY: 2,551.2

• VIX: 14.86 (Ticking up from year lows)

• GC: 4,481.9

• CL: 57.99 / 55.12

• BTC: 87,646

The Overnight Picture

Right now the overnight futures are a little neutral to negative depending on which index you look at.

VIX is popping a little higher which may also be a small warning shot to an early sell-off.

Still doesn’t mean we won’t see or can’t see a rally week. Just means we may start the day/week with a little hiccup.

The Tale Of Two Swings

SPX: Firmly in a bull swing and popping new all-time highs. Target 6949.15 is within reach.

RUT: Firmly in a bear swing and meandering sideways, collecting that holiday period theta. Target 2519.47.

The divergence continues. Mr SPX is in full Christmas party mode whilst Uncle Russell is nursing a hangover in the corner.

The Santa Rally Reality Check

The official window: Last 5 trading days of December + First 2 trading days of January.

This year that’s December 24th open through January 5th close.

We’re in it. Now we wait to see if Santa calls or not.

Historical stats when he does call: S&P 500 gains an average of 10.4% in the following full year.

When he doesn’t (“naughty list”): Average of only 6.1% for the subsequent year.

That’s the real indicator. Not the 1.3% rally itself.

The Plan

Let’s see if we can pop some premium at the opening bell.

Expert Insights:

Santa Rally window is open. VIX ticking higher. SPX bull swing vs RUT bear swing.

Jeffrey Hirsch (son of Yale Hirsch who created the Santa Claus Rally concept) recently clarified that a failure to rally is not an immediate bear market signal, but rather “a flag to start looking at the other data – whether it’s seasonal indicators or other fundamental or technical measures.”

The data backs this up: when the Santa Rally is positive, the S&P 500 has delivered an average January gain of 1.4% and an impressive 10.4% return for the full year that follows. When the index is down during this period – the “naughty list” – averages drop to -0.1% for January and 6.1% for the subsequent year.

The Santa Rally is part of what Hirsch calls the “January Indicator Trifecta” – the rally itself, the first five trading days of January, and the full month January Barometer. When all three are up, the S&P 500 has been up 90% of the time with an average gain of 17.5%.

[Source: LPL Research – “Santa Claus Rally: Bullish Start to 2026?”]

Fun Fact:

The January Indicator Trifecta: Yale Hirsch’s Warning System

When all three indicators are up (Santa Rally + First 5 Days + January Barometer), S&P 500 has been up 90% of the time with average 17.5% gains. When all three fail? Average -3.6% loss.

Everyone’s banging on about whether Santa will show up this year, but they’re missing the bloody point! Yale Hirsch didn’t invent the Santa Claus Rally in 1972 as a trading strategy – he created it as a WARNING SYSTEM. The 1.3% average gain over 7 days isn’t the story. The story is what happens when Santa DOESN’T call. “Bears may come to Broad and Wall” isn’t just a cute rhyme – it’s backed by decades of data.

Failed Santa Rallies have preceded bear markets and periods where stocks could be bought cheaper later. Even better: Hirsch linked the Santa Rally to two other January indicators. When all three are up? S&P 500 positive 90% of the time, average gain 17.5%.

When all three fail? Average LOSS of 3.6%. So yes, we’re watching to see if Santa calls. But not because we want the 1.3%. Because we want to know if bears are coming to Broad and Wall in 2026.

[Source: Stock Trader’s Almanac, Jeff Hirsch ]

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