S&P 500 Best Days of Month

The stock market tends to make most of its gains during the following trading days of the month:
- last 3 days
- first 2 days
- days 9, 10, and 11 (probably because of 401k inflows).

- Yale Hirsch in the Stock Traders Almanac calls these days - the last 3 plus first 2 plus days 9-11 - the "Super 8 Days." They have gained 2.2% v. -.43% for all other days of the month for the last six years (2000-2006).
Note that these are trading days, not calendar days, sent to follow or incorporate the strategy, you must count the number of trading days from the beginning and until the end of the month.
- Stock Trader's Almanac, 2007

First Day of Month Very Bullish for Dow Jones Industrial Average

Over the past 10 years, the market has made all of its gains during the first trading day of each month. In fact, the average of all other days of the month was negative.

From September, 1997 - 6/1/06 1st d of month, there were 106 such first days.
- The Dow gained gained 41.7 points on average during the first day of each month vs. a 0.37 point loss the other days.
The first day of August performed worst falling 6 of the last eight times.

- Stock Trader's Almanac, 2007

First Months of the Quarter Tend to be Bullish

According to the Stock Trader's Almanac, 2007, the first month of each quarter tends to be bullish:
Quarter: 1st month average percentage change, S&P 500, 1950-June, 2006:
I (Jan) 1.4%
II (Apr) 1.3%
III (Jly) 0.9%
IV (Oct) 0.9%

Average: 1.2% v. 0.06% average for month #2 and 0 .17% month #3.
- Stock Trader's Almanac, 2007

SPY update: the ugliness resumes...

10/19/07 4:37 pm (SPY 149.6): Today's 300+ point plunge was no doubt heavily distorted by options expiration but may reflect some fundamental reality. The dollar's decline, oil's rise, and the great uncertainty over the extent of the credit damage were all cited as reasons for the decline, but of course those factors were present during the recent almost 20% trough-to-peak rise in the SPY.
Technically, one does not have to know the fundamental why of a market's movement to make money or protect profits. This market seems in a sloppy 20% range characterized by broken uptrend lines, false breakouts, then surges back to new highs. This is the third such break by my count, the first being in February, the last during the summer, and now.
Things to note: an uptrend line was broken at 155 last week. The market traded below this line all this week then broke decisively below its 20 day trailing low.
It will be interesting to see how the market behaves on Monday once the options overhang is gone and people have had time to digest CAT's pronouncements on the economy, etc. If the July-August script is followed, we are only halfway down if that, but the dollar has crumbled since then and the Turkey-Kurdish conflict has surged and represents a potential meltdown in the only part of Iraq that was starting to resemble something close to success.
Extremely bullish seasonality is just around the corner, during the November-January stretch in particular, so if there is a sell-off, the opportunity to make sharp gains in the next few months will increase.

On Innumeracy: A Minor Quibble about Percentage Calculations in an NPR Story

David Kestenbaum in "Japan Wrestles with Kyoto Accord Promises" stated that "instead of cutting emissions by 6 percent, they have grown about 8 percent. That adds up to a 14 percent problem."
Actually, this is incorrect and reflects a commonly-held misunderstanding of percentages. Percentage declines cannot be directly added to percentage gains to get a percentage difference. To illustrate this fallacy, lets say the base emission index had a value
of 100. A 6% decline would have brought the index to 94, Japans target. An 8% gain, however, would bring the index to 108. The percentage difference between 108 and 94 is 14.9%, not 14% as reported in your story.
When the percentage differences are small, as in this case, the error of simply adding the percentages is also small, but larger numbers illustrate the fallacy. For example, if Japan had wished to halve its emissions (a 50% reduction), the difference between this ideal and the actual 8% gain would be a whopping 116%, far greater than the 58% difference that Kestlebaums method would have computed.
Just a minor point in an otherwise solid story.