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Daniel Nadler
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Daniel J. Nadler is a Visiting Scholar at the United States Federal Reserve and a PhD Candidate at Harvard University. His writings have been featured in the The Wall Street Journal and Bloomberg. At the Federal Reserve, (Research Department, Boston Fed), Daniel studies the asset allocation... More
My company:
Seasonal Odds
My blog:
Seasonal Odds
  • Strong Seasonality Typically Lifts Markets Before Christmas  0 comments
    Dec 18, 2012 4:44 PM | about stocks: GLD, IWM, QQQ, SPY, DIA, AAPL

    With the fiscal cliff fast approaching and taxes seemingly rising next year one way or another, the end of this December would seem to be an excellent time to sell stocks and lock in gains from an overall bullish year. Not so fast. The last five trading days before Christmas sees some of the best seasonality of the year: At Seasonal Odds we analyzed the performance the Dow Jones, the Nasdaq, the S&P 500, the Russell 2000, and Gold during the five trading days prior to Christmas over the last 7 years.

    (click to enlarge)

    (click to enlarge)

    We found striking bullish seasonality during the last five trading days before Santa visits. For Apple (NASDAQ:AAPL) and small-caps (NYSEARCA:IWM) Christmas truly comes early, with those equities advancing an average of 2.64% and 2.05%, respectively, during the five trading days prior to Christmas over the last 7 years. That's almost a year's worth of respectable gains eked-out in merely the five trading days before Christmas. The Nasdaq (NASDAQ:QQQ) as a whole also shows its holiday spirit, gaining 1.14% on average during the week before Christmas. The Dow Jones (NYSEARCA:DIA) and the S&P 500 (NYSEARCA:SPY) are less festive, but certainly still jolly, pulling in 0.83% and 0.65% respectively. Gold (NYSEARCA:GLD) is the worst performing of the pre-holiday bunch, gaining only ("only") 0.47% in the five trading days before Christmas, possibly because while easy to wrap, its sheer weight too easily reveals its identity under the Christmas tree.

    About Seasonal Odds: Developed at Harvard and MIT, Seasonal Odds is the first ever live-updating stock market almanac.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Stocks: GLD, IWM, QQQ, SPY, DIA, AAPL
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