Cramer still believes in Santa Claus rally even as omicron cases spike

CNBC's Jim Cramer mentioned Tuesday he believes there will likely be a Santa Claus rally this yr regardless of the raging omicron variant that's spiking Covid cases in the course of the holidays.

The seasonal inventory market phenomenon has traditionally began round now and continued into the primary days of a brand new yr, the "Mad Money" host mentioned, utilizing a extra liberal time-frame for the Santa Claus rally.

"It is uncanny" how usually this development has labored, Cramer mentioned on "Squawk Box," citing the analysis of market historian Larry Williams. "It is hard to go against something that's been right every time that's made you money."

Cramer tweeted early Tuesday: "Historically today is the day the Santa Claus rally starts. It worked even during 2007-2009. So it is hard to doubt."

Later, on "Squawk Box," Cramer mentioned, "If you bought today and you just held on even for six days, you made money almost every single year." He added, "It is a short-term trade, although then you start getting into positive seasonality in January."

January has been a traditionally sturdy month for the inventory market, informing the previous Wall Street adage, "As goes January, so goes the year." However, the S&P 500's 1.1% decline in January 2021 didn’t dictate the yr. Santa Claus rally or not, this yr is poised for stellar features, barring any big declines. For all of 2021, as of Tuesday morning, the Dow Jones Industrial Average was up 15.3%; the S&P 500 gained 22.4% and the Nasdaq Composite was up 17%.

Jim Cramer still believes markets will see a 'Santa rally' earlier than 2022Squawk Box

U.S. shares on Tuesday had been rebounding in a rally that may break a three-session dropping streak. "What's interesting is that we've had this downturn and the Santa Claus rally would dictate that the downturn is now over," Cramer mentioned. For the month of December, the Dow is up 2.4%, the S&P 500 is up 0.7%, and the Nasdaq is down 2.8%.

It's value noting that there's debate on Wall Street on the precise date the Santa Claus rally historically begins. According to the Stock Trader's Almanac, it takes place over the past 5 buying and selling days of December and the primary two periods of January. Santa no-shows on Wall Street are likely to precede tough intervals for shares. The Stock Trader's Almanac found this development in 1972.

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