The 'santa rally' is based on the phenomena of general good sentiment around Christmas and the end of the year. You can see the strength of the seasonal pattern here. Over the last 71 years the S&P500 has gained 55 times between Dec 17 & Dec 31.
The question now is has the Fed reassured equity traders that it can pause rate hikes if it needs to. Or is the 3 signalled rate hikes enough to get them heading for the sidelines? It's a hard question to answer, but caution would be the better part of valour here in my book as stocks have been on a great run and a hiking Fed should be enough reason for a pause and retracement..
