Thursday, September 30, 2010

Amazing Stat - Over 12 Year Period You Made More on 1st Day of Month then all Other Days Combined

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Some amazing statistics from an unlikely source - USA Today.  I wish these folks would use the broader S&P 500 than the old DJIA.

First, 7 of the 9 first days of the year have been up (78% win rate) Partly due to "first day inflows" (401ks and such) and a lot of those days we were waiting for Chinese Purchasing Managers Index reports overnight (released before their first day of the month) which usually led to premarket surges in the U.S..  Translation to bears: You feeling lucky punk?? (remember there is a very interesting Manufacturing ISM tomorrow - let's see if it can break the pattern)

 FIRST DAY RALLIES
The first trading day of the month has been a good day to own stocks in 2010. First-day performance, measured by points, for the Dow Jones industrials:
January
156
February
118
March
79
April
70
May
143
June
-112
July
-41
August
208
September
255
Source: USA TODAY research

  • The last day of the month this year has been poor from a performance standpoint, with the Dow either flat or in the red each month.

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While that is a quite interesting statistic here is the astounding one.  I am curious why they stopped at May 2009 (perhaps data mining) but in a 12 year period you could make as much on the first day of the month, as all other days of the month combined!
  • There is no sure thing on Wall Street. But making money in stocks on the first trading day of a new month is a good bet.  
  • The 2010 edition of the Stock Trader's Almanac notes that in the 12-year period ending May 2009, the Dow Jones industrials "gained more points on the first trading days of all months than all the other days combined." The tally: plus 4,399 points on the first days of months, vs. a loss of 3,809 points the rest of the days.
That is just amazing.  Wish they had gone through mid 2010 to see if it continued.

Look for a second fund launch in late 2011: 1st Day Fund   Our strategy? 100% net long from 3:59 PM the last day of previous month through 3:59 PM first day of the month, 100% cash otherwise.  Boo Yah.

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