What to do on Blizzards
This blizzard is pretty sick. 18 inches of snow. Blustery winds.
Freezing temperatures that make you want to avoid going outside and shovel. But the critical question is: should you trade on a snow day?
I did a simple study. I loaded up all the weather data for Central Park, NYC since WW II. I looked at every day where there was more than 5 inches of snow on the ground and asked the question: were those days up days or down days.
This is a critical question for my kids. They don't want me to trade on snow days. They want me to build a snowman. Should I?
Answer: on average, snow days are down days.
On Dow, since 1945:
- 56 occurrences
- Average return per “snow day”: -0.22%
- Percentage snow days down: 61%
On Nasdaq since 1972:
- 6 / 16 down, -0.37% per snow day
The top pane represents inches of snow in Central Park that day. The bottom pane contains bars representing the open, high, low, close from each day in late January 2004 on the QQQQ. As you can see, the market fell when Central Park had more than 5 inches of snow. Its one example, not a proof, but the stats show negative bias since WW II.
Read more from Altucher on his websiteThe Altucher Confidential.
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