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Shrideep Murthy
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CFA Level 2 Candidate. Masters of Finance Candidate, PACE University, New York. Prior work experience: -24 months as a proprietary trader trading in NYSE and NASDAQ. -14 months as a C++ developer at a Top-20 IT Consulting organization, KPIT Cummins Infosystems Ltd, India. Portfolio Manager:... More
  • Is Friday, The Thirteenth Jinxed For The Markets? 0 comments
    Jul 13, 2012 8:14 AM | about stocks: DIA

    Any given Friday is a happy day. People start planning for the weekend and the mind is a little relaxed. Not so much, if it is Friday, the 13th.

    There are several stories about this day, some dating back to biblical days and some to the 14th century. The story about how the number 12 is complete and 13 a transgression is most commonly heard as it is supposed to have enough evidence in various occurrences in the universe. But the credit for giving this myth a Wall Street flavor goes to author Thomas Lawson who authored the novel, Friday, the Thirteenth. In this, the protagonist creates a panic on Wall Street drawing on people's misconception and fear. And since then, the believers have been waiting for the 'end of the world' kind of a crash to happen on Wall Street.

    Though there have been quite a few major drops on a Friday, does the theory of Friday, the 13th hold true for the stock markets (NYSEARCA:DIA)? The table below tells it all:

    Day

    %change

    High-Low Range as percentage*

    April 13, 2012

    -1.05

    1.09

    January 13, 2012

    -0.38

    1.27

    May 13, 2011

    -0.79

    1.35

    August 13, 2010

    -0.17

    0.67

    November 13, 2009

    0.71

    1.11

    March 13, 2009

    0.79

    1.91

    February 13, 2009

    -1.04

    1.64

    June 13, 2008

    1.34

    1.36

    July 13, 2007

    0.34

    0.62

    April 13, 2007

    0.48

    0.68

    October 13, 2006

    0.11

    0.43

    January 13, 2006

    -0.01

    0.65

    May 13, 2005

    -0.47

    1.56

    August 13, 2004

    0.11

    0.72

    February 13, 2004

    -0.64

    1.22

    June 13, 2003

    -0.88

    1.62

    December 13, 2002

    -1.20

    1.33

    September 13, 2002

    -0.78

    1.56

    *range of the day calculated as a percentage with the opening price as the base.

    There have been 18 occurrences in the past decade when Friday and the 13th day of the month have coincided. And ironically the markets have been 'eerily' quite! The largest move for the market occurred on June 13th, 2008 when the market rose 1.3% and on December 13th, 2002, when the market fell 1.2%. The average market movement has been 0.6% and the average range as a percentage has been 1.1%.

    Even though the 13th visitor may have died or 13 might be a really unlucky number, this theory doesn't seem to suggest anything catastrophic for the markets today. And with the VIX (VOLATILITY S&P 500: VIX) trading at relatively low levels it might in fact be a day to go home early!

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: market-outlook Stocks: DIA
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