Saturday, December 14, 2013

Post-Thanksgiving Market Performance

Seasonality Post-Thanksgiving

Always nice if you can position yourself with the odds in your favor.

The chart above for the S&P 500 suggests that the day after Thanksgiving - always a light volume half-day for the market - is statistically half-and-half for gains and losses. Thus, we don't have any edge in either direction.

Once December hits, however, the odds swing decisively into the Bullish camp. Only two of the previous ten Decembers have been down, and one of those, in 2005, was basically even.

Anything can happen in any particular year. 2013 was notable for its lack of pullbacks of any strength. That is the kind of year when an unusual December might happen. However, I wouldn't bet on that, not given the heavy statistical odds of a Bullish December.

You need an edge when you trade.