Are there any trends in the stock market post-Christmas?
Does it usually go up or down? What are some of the factors that feed into these trends?
The January affect is very valid.
This is not my opinion but a statistic, you should see how the first 5-6 days of the new year trade, if the S&P’s first 5 days show a net gain, the remainder of the year will be a bull market, this has been true 86.1% of the time since 1950 when this study began.
10 of the last 14 post-election years followed the direction of the first five days!
Also, every year since 1950 that January showed a net loss for the month, the year was either flat, or a bear market…WITHOUT EXCEPTION!
Again, these are statistics taken straight from the stock trader’s almanac.
The factors that feed into the trends, interest rates, business cycles coming to an end, market pshychology, sentiment being negative or positive, and the overall temperature for business in the economy at the given time, as well as how certain / uncertain business trends look for the next 6-9 months
February 28th, 2010 at 4:17 am
Buy stocks Christmas week, sell mid-January. In this low interest rate environment the ‘January Effect’ is almost guaranteed.
References :
former NASD Principal
February 28th, 2010 at 4:41 am
I tend to agree with Answer one, but I suggest selling no later than Jan 7th.
References :
February 28th, 2010 at 5:19 am
With the market this year as it has been I do not think you can count on anything doing as it "usually" does.
I think the year end statements might shock some people. I can’t say if that will be true or not to drive the market down but I know plenty of people that have claimed they only look at their investments once a year claiming to be "buy and holders".
And those statements will be very bad, for the last quarter and the year.
IMO, everything appears to still be heading down. I see nothing yet to suggest we have even bottomed in the economy, let alone ready to improve.
Although the market tries to predict 6-9 months ahead I can’t see anything to say things will be better by June.
Do you?
References :
February 28th, 2010 at 5:27 am
The January affect is very valid.
This is not my opinion but a statistic, you should see how the first 5-6 days of the new year trade, if the S&P’s first 5 days show a net gain, the remainder of the year will be a bull market, this has been true 86.1% of the time since 1950 when this study began.
10 of the last 14 post-election years followed the direction of the first five days!
Also, every year since 1950 that January showed a net loss for the month, the year was either flat, or a bear market…WITHOUT EXCEPTION!
Again, these are statistics taken straight from the stock trader’s almanac.
The factors that feed into the trends, interest rates, business cycles coming to an end, market pshychology, sentiment being negative or positive, and the overall temperature for business in the economy at the given time, as well as how certain / uncertain business trends look for the next 6-9 months
References :
Stock Traders Almanac; personal experience