Will the Markets See Their Shadow this Groundhog Day?
It's Groundhog Day, the day meteorologists turn to these furry little prognosticators to determine whether Spring will come early or we will have another 6 weeks of Winter. If the groundhog sees its shadow, there are more cold days ahead.
So with the sun literally shining on Wall Street this morning, the odds of a shadow sighting are up and the Dow and S&P 500 are down as of midday trading. Here is a look at the historical relationship between Groundhog Day and the major US indices and whether the markets are in for more cold days ahead or not. For the S&P and Nasdaq , there are greater odds of an up day on February 2 than gaining over the following six weeks. For the Dow, the opposite is true.
Dow (since 1897):
- February 2: Average gain of 0.05%, up 55.6% of the time
- 6 weeks later: Average gain of 1.02%, up 60.3% of the time
S&P 500 (since 1928):
- February 2: Average gain of 0.16%, up 64.4% of the time
- 6 weeks later: Average gain of 1.24%, up 60.0% of the time
NASDAQ (since 1972):
- February 2: Average gain of 0.13%, up 75.0% of the time
- 6 weeks later: Average gain of 2.09%, up 65.0% of the time
All indices, however, have been up over the following 6 weeks more often than not. The Nasdaq has had the best gains on average in the 6 weeks that follow Groundhog Day. Today seems to be an up day for NASDAQ as well, with Akamai , Microsoft , Steel Dynamics , Express Scripts and Yahoo leading the NASDAQ 100 to the upside.
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