The 2020 “Santa Claus Rally” Could Leave 150% Profits In Your Account

Yes, there is a Santa Claus… a Santa Claus Rally, that is. And there's 74 years of market history that proves it. In almost every December since 1945, the S&P 500 rose nearly 1.5% – advancing in price 73% of the time.

Just like Christmas itself, I look forward to the Santa Claus Rally pattern every year, and this year is no exception.

The market phenomenon runs from the first trading day after Christmas – Dec. 28, 2020 – and runs until the second trading day of the New Year – Jan. 5, 2021.

Time and time again we've cashed in on this, and this year, I've got a setup that could potentially return 150% by Jan. 8.

Here's how…

The Santa Claus Rally Is One Heck of a Tree-Topper

The Santa Claus Rally has occurred 65% of the time over the past 74 years for an average return of 1.3%.

Now, admittedly, 1.3% doesn't sound too impressive, particularly if you're a novice trader. But that's an average for all stocks. In practice, massive gains can be had on individual stocks and sectors. And with the incredible leverage of options, it's possible to turn a 1.3% move into triple-digit gains.

Say you were to buy the SPDR S&P 500 ETF (NYSEArca: SPY) on Dec. 28 of this year and sell it on Jan. 5, 2021 – you'd have a 65% historic probability of making 1.3%.

I think we can all agree that's nothing to write home about.

Now, even with the increased return on investment (ROI) from options contracts, you can estimate the return by multiplying the historic ROI by 10 – meaning you'd receive a 13% return.

Not bad, but we can do better.

Because we know the S&P 500 tends to rise during this time, it means we can take the top stocks from this index to find an edge. And we can amplify this edge by picking stocks that historically move up during this period.

Over the past 10 years, the following five stocks have consistently outperformed the general market during the Santa Claus Rally:

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Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

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