Stocks

Stock prices have been dropping since October. Yet they can still drop more. That’s because, even after double-digit declines, stocks remain overvalued.

As investors suffer through the worst December since the Great Depression, they need a Santa Claus rally now more than ever.

This chart highlights the consistency the Santa Claus rally has seen. That helps explain why it’s a phenomenon tracked heavily in the markets.

Bull markets condition individuals to buy dips. Uptrends reward buyers for that behavior. But in a bear market, dip buyers rapidly face large losses.

The death cross has happened right before some of the biggest market crashes in recent history. However, it hasn’t been bearish over the long run.