As I mentioned to some of the traders, my 2007 copy of the Stock Trader's Almanac sits in the fireplace as kindling for the winter time. While no one can predict the future with 100% accuracy, there are times when knowing what has been done in the recent past can get you into or out of certain trades.
For example, with the lack of headline news, the almanac states between 1996 and 2006, the average 5-day performance of the averages on the week before the Labor Day holiday are:
DJIA -2.6%, NASDAQ -2.1%, and S&P 500 -2.3%. The Thursday before Labor Day, the market was down 9 of the last 10 years.
While Martin Zweig is known for his calendar and holiday analysis, absence of news, its usually better to rely on the 5 or 10-day intraday timeframes to see if a support or a resistance level is about to be breached.
This is one of the rare days when I am out of sync with the markets as the 90 stocks on my watchlist are all in the red and I did not have a short position to take advantage of today's move.
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