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Will Europe Spoil a Normally Happy Thanksgiving?

Tuesday, 22 Nov 2011 | 5:49 PM ET
Thanksgiving
James Baigrie | Getty Images
Thanksgiving

U.S. stocks historically traded up the day prior to Thanksgiving and on Black Friday, posting average gains of 0.34 percent and 0.22 percent, respectively, over the last 20 years.

During Cyber Monday, however, those gains evaporated.

This year, will the European debt crisis bring the market holiday cheer to an end?

"We've been taking down our gross exposure to the U.S. stock market for all of November and plan on keeping our net exposure tight into and out of the long weekend," said Keith McCullough, CEO of Hedgeye Risk Management. "We’ll use any volatility from European trading as an opportunity to fade the market’s direction (up or down). Buy red; Sell green."

McCullough believes that investors should use the recent market pullback and the long-weekend to pause and review what has happened to their portfolios. "Growth slowing globally isn’t just about Europe. It’s about Asia. It’s about debt. Debt structurally slows growth," he added.

Historical ReturnsWithin the Standard & Poor's 500 index , telecom and consumer discretionary stocks rose the most the day prior to Thanksgiving in the past 20 years, while technology and material stocks led the way during Black Friday.

On the contrary, energy, financial and telecom had the largest losses during Cyber Monday. The table below highlights how stocks performed during the Thanksgiving holiday.

  Price   Change %Change
S&P 500
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