The S&P 500 index is struggling to maintain momentum, raising doubts about a Santa Claus rally this year. Experts warn this might indicate a bear market on the horizon.
Santa Claus rally may not happen
S&P 500 struggles below 50-day average
Benchmark closed at 6,800 on Tuesday
Recent drop of 0.7% in December
Average December gain is 1.4%
Lack of rally could signal bear market
Possible bigger breakdown ahead
The S&P 500 index may not experience the anticipated Santa Claus rally this year. BTIG’s chief market technician, Jonathan Krinsky, notes the index is struggling to stay above its 50-day moving average of about 6,767.
On Tuesday, the S&P 500 closed at 6,800 but reached an intraday low of about 6,760. Krinsky highlighted that the index failed to hit new highs during December, which changes the market’s dynamics.
Market Indicators Raising Concerns
Despite setting record closing highs in December, the S&P 500 hasn’t surpassed its intraday all-time high of 6,920 from October 29. The index is down 0.7% during a month historically known for gains.
According to the Stock Trader’s Almanac, the S&P 500 usually gains 1.4% in December, with the Santa Claus rally contributing an average increase of 1.2% during the last five trading days of December and the first two of January.
Implications of a Weak Market
If the S&P 500 does not maintain its position above the 50-day moving average, it could be a sign of further declines. Krinsky believes that while the index may hold for now, a subsequent test could lead to a significant downturn.
The Almanac warns that failing to see a Santa Claus rally often precedes bear markets or opportunities to purchase stocks at lower prices later in the year.
Sophia Clarke is a senior international journalist with nine years of experience covering global politics, human rights, and international diplomacy.
She earned her M.A. in International Relations and Journalism from the University of Oxford (2016), where she specialized in global governance, conflict reporting, and cross-cultural communication.
Sophia began her career as a foreign correspondent for BBC World Service and later joined The Guardian, where her insightful analyses and on-the-ground reporting from Europe, the Middle East, and Latin America earned her recognition for accuracy and integrity.
Now based in Paris, France, Sophia contributes to Faharas NET, providing comprehensive coverage of diplomatic affairs, humanitarian issues, and policy developments shaping the international landscape. Her storytelling combines investigative depth, journalistic ethics, and a strong commitment to amplifying underrepresented voices in global dialogue.
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