Here come the holidays. Can you believe it is Thanksgiving week already? This week has a strong historical trend. The Wednesday and Friday of this week are positive an inordinate amount of the time, over 75% during the past 50+ years. Everyone knows it and yet the trend continues. That's a rarity in the market.
Chart provided courtesy of www.sentimentrader.com
The Monday before Thanksgiving (today) has a negative bias. Perhaps today's action will be a guide to tell us if this trend will remain on track for this year. In 2003 and 2004, Wednesday was much stronger than Friday but all four days in those years were positive. In 2001 and 2002, one day was positive and the other negative. Each time the positive day was up much more than the negative day was down.
Seasonality data is good
to know but tends not to be too reliable except for a couple of times
during the year, and this is one of them. If the positive bias is
going to continue this year it will be fighting the overbought condition
the market now finds itself in. And as always, there are no
guarantees.
You can see in the chart above that not only is today the most negative
day of the week but next Monday, and all next week in fact, has a
negative historical return. I am still strongly leaning on the
side of the market getting ready to pullback. But that pullback
may have to wait until after the holiday.
The "smart money" sentiment survey came out this weekend with some
interesting results. Both the bullish and the bearish percentages
of the poll came out very low with nearly 60% being neutral or
undecided.
Chart provided courtesy of
www.decisionpoint.com
So the "smart money" is neither overly bullish, nor
overly bearish. Just overly neutral.
I don't want to look too much further past this week right now.
This week is almost too predictable to look at the long term. If
we do see weakness today and/or Tuesday, I may make a move into the
stock funds for Wednesday and Friday with the intentions of going back
into defensive mode next week.
I'm getting a bit discouraged by the recent response to the Item of the Day
in
The
Gallery as only one item sold
last week. I'm not sure how much more time I want to invest into
it so I may have to start thinking of other alternatives to help support
the site. I am open to suggestions.
That's all for today.
Currently
100% G fund. Thanks for reading. See you
tommorow.
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