S&P Stocks For The Santa Claus Rally

The overall market is expected to move higher from December 15^th through January 9^th-11^th. Seasonally this has been one of the most bullish periods in any year. This period has been up about 70% of the time since 1885. This year is likely to be exceptional due to the occurrence of Dewey’s Cycle. Mr. Edward Dewey, the founder of the Foundation for the Study of Cycles (cycles.org), noted an oddity in stock prices that could only occur between December 20^th and January 20^th. He was seeking a way to add value to the usual seasonal strength, especially the Santa Claus Rally. He discovered that once every two to three years, there was exceptional strength in this time period. Applying his barometer, the likelihood of a higher market from December 15^th to January 7^th is as high as 84%. It was 89% when he initially conducted the study. He wrote about this in a 1969 edition of Cycles, the journal of the Foundation.

Given this positive outlook, let us seek stocks that tend to outperform in this three-week period. The list is sorted by the percentage of times in which the equity rose in that period which is listed in the third column. The second column is the percentage of price return. Column one is the expected return, the product of columns two and three. We see that Johnson ControlsJCI
, JCI, is ranked first. It has risen 83.3% of the time over the last 30 years.

Other stocks that are likely the best selections from the list are Deere (D) and Interpublic Companies (IPG). Boston ScientificBSX
(BSX) is also well poised to benefit into the first week of January.

Stocks That Are Likely To Outperform In The December 15-January 11 Period: