Super Sized Serving of Scrumptious Satisfying
Seasonal Stock Market Stuffing
Thanksgiving treat week / late November red leaf rally?
The answer is annually affirmative actually, according to Eric Parnell:
History provides an instructive guide for what to expect from the stock market in the coming week. U.S. Congress and President Roosevelt officially designated the Thanksgiving Day holiday as the fourth Thursday of November starting in 1942. In the 69 years since, the stock market as measured by the S&P 500 has posted a weekly gain 40 times, or 60% of the time, during the Thanksgiving week. And the average gain has been a solid +0.60%.
Digging deeper into the numbers provides a more notable breakdown. First, many might point out that we are currently in a secular bear market that began in 2000 and that the potentially positive skew from more stable secular bull market periods (1946-1968, 1982-2000) should be removed from the data. But what is notable is that the weekly stock market performance is actually better during secular bear market periods (1968-1982, 2000-Present). During the 25 years during secular bear markets, stocks posted a Thanksgiving weekly gain 16 times, or 64% of the time, with an average gain of +0.78%.
OK, but what about the specific crisis years within these secular bear markets. After all, when times are particularly tenuous, can we really expect stocks to rally over the Thanksgiving week? The answer on the most part is actually yes. During the 11 years when the market was immersed in oil crises, stagflation, bursting tech bubbles or financial crises, stocks posted a Thanksgiving weekly advance 7 times, or 64% of the time, including an average gain of +1.12%. While this gain number must be taken with a grain of salt, as it includes the +9.73% Thanksgiving week outburst back in 2008, it also highlights how power the holiday week rallies can be during such crisis periods.
Therefore, the Thanksgiving holiday week typically sets up well for stocks. And the market has the ability to perform particularly well during periods of crisis. So by the time you settle in for some pumpkin pie on Thanksgiving Day, it’s very likely that you may be reflecting on a solid week for the markets. It certainly doesn’t mean that the problems plaguing the market have gone away. Far from it. But what history shows is that even the stock market can take a break from its challenges at least for a holiday week.
Turkey T & A: Multi layered support at current levels
Last year we took off like a wild winged turkey, after the left over bird & berries were gobbled.
They will Reflate…..There will be Gravy