The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

The Halloween Indicator

10/29/2010

Of all the many market indicators, this is the most useless but must be fun, as it rolls out year after year. Here it is:

Since 1950, the stock market performs best from the last trading day of October to the end of April. (Of course, there are always obvious exceptions, like the oil embargo of 1973-74, the dot com bust of 2001-2, and the Great Global Financial Crisis of 2007-9.)

It is not news that the market does better during the winter and spring than it does during the summer and fall. In fact, it does a lot better!

The only thing scary about this is that we call it The Halloween Indicator. Let’s just hope it works this year, and the market does as well as it usually does after goblins go away!

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