Gaming the Santa Claus Rally, Y2K Edition

Conventional wisdom says markets rise during the last week of the year, a phenomenon that's quaintly referred to as a Santa Claus rally.

Often, it's the result of stock-chasing, window-dressing fund managers attempting to load up on the year's hottest stocks, while dumping their losers, just before the books close on Dec. 31. The moves make them look good, at least for that one moment in time -- which is the only moment that matters in their annual reports.

This year, many market watchers say the rally should be particularly merry. But they've been saying it with a kind of certainty that is never a very good thing when it comes to the stock market. Because as soon as something -- anything -- gets priced into the market, the market tends to react poorly if that something fails to materialize.

Contrarians at Christmas

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