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Will the Markets See Their Shadow this Groundhog Day?

Wednesday, 2 Feb 2011 | 12:49 PM ET
Groundhog Day
Groundhog
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 a grayish sky over Wall Street this morning, the odds of a shadow sighting are mixed and the Dow and S&P 500 are down as of midday trading. On Groundhog Day the Dow is positive slightly more than half the time, and the S&P and NASDAQ fair better up 64% and 69% of the time respectively. Take aways: The Russell outperforms the Dow, S&P and NASDAQ on Groundhog's Day, and 6 weeks later up 75% of the time on Feb 2nd. In addition, in 2010 the US markets rallied with about a 1% gain or greater by the major indexes on Feb 2nd.

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.

Dow (since 1897):

  • Dow is up 58 % of the time, an average of 0.0 9 % on Groundhog Day
  • 6 weeks later the Dow is up 55% of the time an avg of 0.55 %
  • Dow is up 55% of the time, with an average gain of 2.15% in Q1 when it closes up on Groundhog Day (Historically, the Dow is up 56% of the time in Q1, and has an average return of +1.45% in Q1)
  • Last year on Groundhog Day the Dow gained 111.32 points or 1.1%

S&P 500 (since 1928):

  • S&P is up 64% of the time an average of 0.2 % on Groundhog Day
  • 6 weeks later the S&P is up 53% of the time an avg of 0.33%
  • S&P is up 60% of the time with an average gain of 2.93% in Q1 when it closes up on Groundhog Day (Historically, the S&P is up 57% of the time with an average return of +1.37% in Q1)
  • Last year on Groundhog Day the S&P gained 14.14 points or 1.3%

NASDAQ (since 1972):

  • NASDAQ is up 69% of the time an avg of 0.09% on Groundhog Day
  • 6 weeks later the NASDAQ is up 56% of the time an avg of 0.6%
  • NASDAQ is up 67% of the time with an average gain of 5.8% in Q1 when it closes up on Groundhog Day (Historically, the NASDAQ is up 64% of the time in Q1 with an average return of +3.63% in Q1)
  • Last year on Groundhog Day the NASDAQ gained 18.86 points or 0.9%

Russell 2K (since 1979):

  • Russell 2K is up 75% of the time an avg gain of 0.27% on Groundhog Day
  • 6 weeks later the Russell 2K is up 63% of the time an avg gain of 0.99%
  • Russell 2K is up 63% of the time with an average gain of 4.2% in Q1 when it closes up on Groundhog Day (Historically, the Russell 2K up 63% of the time in Q1 with an average return of +3.88% in Q1)
  • Last year on Groundhog Day the Russell 2K gained 4.80 points or 0.79%

Today, the NASDAQ Composite is the only index up as of mid day levels with Electronic Arts, First Solar , NVIDIA, Seagate Technology and AutoDesk leading the NASDAQ 100 to the upside.

Comments? Send them to bythenumbers@cnbc.com

bythenumbers.cnbc.com

  Price   Change %Change
DJIA
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S&P 500
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ADSK
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FSLR
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NVDA
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STX
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STLD
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MSFT
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AKAM
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YHOO
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