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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Frank Pembleton who wrote (30293)	4/16/2003 7:06:15 AM
From: Frank Pembleton	Read Replies (1) \| Respond to of 36161

The "Hidden" Holiday Market Opportunity By Dr. Steve Sjuggerud President, Investment U Stocks go up dramatically - and somewhat inexplicably - around holidays, says Martin Zweig in his excellent book Winning on Wall Street. According to an exhaustive study conducted by Zweig, "On the last trading day prior to the holiday, the market had an exceptional tendency to rise, no matter what holiday was involved." If you're like me, two questions immediately come to mind. First... just how "exceptional" is this rise in stock prices Zweig is talking about? And second... is there anything I can do to take advantage of this knowledge? Let's tackle these questions in order... There's Nothing "Random" About These Numbers The holidays with the most bullish tendencies are Labor Day and New Year's Day. But Thanksgiving presents its own unique wrinkle... and its own unique opportunity as well. Let's look at Labor Day and New Year's Day first. For the time period of Zweig's study (1952 to 1985 - the book was published in 1986), Zweig found that the day before Labor Day produced the biggest percentage gains - 0.68% on the day, for an annualized gain on that day of 180%. What's more, the market was up 31 times and down only twice before Labor Day. The trading day before New Year's Day had the best percentage of winning days - up 31 times, even once, and down once. Academics like to say the market goes on a "random walk." In essence, there are no patterns, and it's basically worthless to even try to find them. I wonder how these academic "experts" can possibly explain those results. Overall, Zweig looked at a total of 223 "pre-holiday" trading days. And he found that the market fell only 12% of the time - an amazing result. In other words, he found that stock price trends around holidays are extraordinarily bullish. A Consistent Rise in Price the Day Before - And the Day After - Thanksgiving So what's the wrinkle with our upcoming holiday, Thanksgiving? Thanksgiving is a strange holiday for the market, in the fact that it always falls on a Thursday. There is always an abbreviated trading day the day after Thanksgiving. Zweig found that stocks did well, both on the day before and on the day after Thanksgiving. The market rose 30 times the day after Thanksgiving and fell only twice - on par with the pre-holiday days of Labor Day and New Year's Day. And definitely not "random." The average return was 0.63% - which compares to the best pre-holiday day of Labor Day. The day before Thanksgiving also had great results, down only 4 times in 33 instances, for an average gain that day of 0.38%. That is a total profit across the two days of over one percent. So what can one do with this seemingly valuable information? A simple thing Zweig says is: "If you are going to buy stock anyhow, it would not be a bad idea to buy it a day before the holiday in order to increase your odds of getting off to a good start." "Yeah," you might say, "but how about playing it for some action." You could do that. The big thing would be actually getting any bang for your buck. You could buy a no-load mutual fund tomorrow and sell it Friday (since the price you get is determined at the day's close, selling on Friday would give you Friday's close). But is it worth it for maybe 1%? A Unique Opportunity for Speculators We need more bang for our buck. More leverage. And the way to get that is through index options. A small investment can make a very large return. Depending on what you do, a 1% move in the stock market could translate into a 10% gain or substantially more on the options in just a few trading days. Close out your position near the close on Friday. I won't go into all the particulars of this. But if you're interested in doing this, Neil Fern with Fox Investments in Chicago specializes in index options and futures for individual investors. And he tells me that if you get started first thing in the morning on Tuesday opening an account, it is possible to own index options by the market close on Tuesday so you could speculate on this strategy. Don't throw all your eggs at this of course. It's not an investment; it's a speculation. And it's an options play as well, so there's a chance that you could lose the amount you invest.

To: Frank Pembleton who wrote (30293)	4/16/2003 11:00:21 AM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 36161

Frank, ie: "Thread Popularity" ...it really shouldn't be too much of a surprise that peak thread posting/participation always occurs at market tops...ie: the usual arrival of all the late arrivals to the party etc...and that when sector's roll over and sell off, or become locked in lackluster trading ranges, that participation & posting fall off dramatically....and you've got to remember, that given those little arms, Chihuahua-Cheerleaders tire very quickly from waving those Pom-Poms (vbg). We had waaaaay tooooo many Gold-Bulls - waaay tooo bullish. Let's face it...97.5% of the population are sheep, 2.5% wolves...and thankfully so. Literally, no more accurate TA indicator exists, than the Sentiment Indicators on many of these well established SI threads. The end of the recent interim Gold/Goldstock run could not have been more accurately indicated than it was, by the late arrival of the herd of dancing chihuahua's here from Jan thru March on this thread...as well as the Volcanic eruption of the End of the World/Gold-Loonies battling amongst themselves, in trying to become the gloomiest, of the doomiest... and likewise, it should be no surprise that they have now slithered back under the porch...where they belong (vbg). ...I've found more "action" battling dandelions & doing the Spring-Thing...than there is in the Gold Market of late.....y-a-w-n~ All that's needed here is - CASH & PATIENCE - for the next "High Reward-Low Risk" Opp. ciao`