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The Almanac Investor: September Vital Statistics Report


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#1 TTHQ Staff

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Posted 30 August 2006 - 08:29 AM

Almanac Investor Alert: 8/29/2006

*** September's Vital Statsistics Report***

Despite September’s dubious honor of being the worst month of the year and the only one that averages sizable declines, it does have a few bright spots. The Dow has been up the first trading day eight of the last eleven years though three of the last four have been down. The day after Labor Day has experienced Dow gains ten of the last twelve years although it was crushed 4.1% in 2002.

Monday before Triple Witching is also strong, but after that stocks tend to get knocked lower. The week after Triple Witching is awful and September tends to close poorly as end-of-third-quarter window dressing creates heavy selling.

We are proud to announce that the 40th Anniversary Edition Stock Trader’s Almanac is on the press and should be out early this fall. In it we have added several new features and changed things around. One pattern is pertinent to September this year.

There is an old saying on the Street, “Buy Rosh Hashanah, Sell Yom Kippur.” Though it had a good record at one time, it stopped working in the middle of the last century. Still, it gets tossed around every autumn when the “high holidays” are on the minds of traders as many of their Jewish colleagues take off to observe the Jewish New Year and Day of Atonement. It’s not unlike the “Summer Rally,” which gets mentioned every year despite the fact that it’s the worst season for stock prices.

We ran the numbers for page 82 of the 2007 Almanac and found the reverse is now true and took it a step further to calculate the return from Yom Kippur to Passover. Selling stocks before the eight-day span of the high holidays has avoided many declines, especially during uncertain times. While being long Yom Kippur to Passover has produced more than twice as many advances, averaging gains of 7.1%. Rosh Hashanah occurs on the 23rd and Yom Kippur follows on October 2nd.

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Please trade carefully.
Those who study market history are bound to profit from it.

Sincerely,
Jeffrey A. Hirsch, Editor & Publisher
The next issue will be available after the close on September 14, 2006.