The Gift that Keeps on Giving Every year a certain stock market phenomenon is said to recur, anticipated with excitement by investors: the Santa Claus rally. It is held that stock prices typically rise quite frequently and particularly strongly just before the turn of the year.
I want to show you the Santa Claus rally in the German DAX Index as an example. Price moves are often exaggerated in the German stock market, which leads to quite pronounced – and hence profitable – seasonal trends.
Recurring trends can be discerned at a glance on a seasonal chart The chart below is not a standard chart that depicts a price trend over a specific time period. Rather, this seasonal chart shows the typical seasonal pattern of the German DAX Index. It illustrates the average returns generated by the index in the course of a year over the past 20 years. The horizontal axis shows the time of the year, the vertical axis shows the price information indexed to 100.
This post was published at Acting-Man on December 7, 2017.