Market Trades Steadily Lower During Last Two Sessions of January

In a comment to Thursday evening’s column, a subscriber detailed the S&P’s tendency to trade higher over the short-term when it closes lower the last two days of the week. Building on this idea, I ran a similar study involving the final sessions of the month and found a similar tendency. When the S&P500 closes lower on the final two trading days of a month, the market has a better-than-average chance of trading higher during the first 2-3 days of the next month. The table below lists each of the last thirty instances in which the S&P closed lower the last two sessions of the month. Note that in 26 out of 30 occurrences, or 87% of the time, the S&P posted a subsequently higher close (above Friday’s) 2-3 trading days later. That 87% win rate is significantly greater than the 63% at-any-time odds for a higher S&P close 2-3 sessions later…

S&P500 Closes Down Last Two Days of Month
01/30/09… S&P500 ???
04/30/08… S&P500 +2.0% two sessions later
02/29/08… S&P500 +0.2% three sessions later
06/29/07… S&P500 +1.4% two sessions later
04/30/07… S&P500 +0.9% two sessions later
12/29/06… S&P500 +0.0% two sessions later
08/31/06… S&P500 +0.7% two sessions later
03/31/06… S&P500 +0.9% two sessions later
12/30/05… S&P500 +2.0% two sessions later
06/30/05… S&P500 +1.2% two sessions later
11/30/04… S&P500 +1.4% two sessions later
04/30/04… S&P500 +1.1% two sessions later
06/30/03… S&P500 +2.0% two sessions later
03/31/03… S&P500 +3.9% two sessions later
09/30/02… S&P500 +1.6% two sessions later
08/30/02… S&P500 -4.0% three sessions later
10/31/01… S&P500 +2.6% two sessions later
02/28/01… S&P500 +0.1% three sessions later
11/30/99… S&P500 +1.5% two sessions later
08/31/99… S&P500 +2.8% three sessions later
07/30/99… S&P500 -1.8% three sessions later
04/30/99… S&P500 +0.9% three sessions later
03/31/99… S&P500 +2.7% two sessions later
02/26/99… S&P500 -0.9% three sessions later
12/31/98… S&P500 +1.3% two sessions later
08/31/98… S&P500 +3.4% two sessions later
08/29/97… S&P500 +3.2% two sessions later
03/31/97… S&P500 -0.9% three sessions later
02/28/97… S&P500 +0.0% two sessions later
12/31/96… S&P500 +1.0% two sessions later
08/30/96… S&P500 +0.6% two sessions later

Categories : Archived EOD Commentary, End-of-Day Commentary

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