Will the Markets See Their Shadow this Groundhog Day?

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.

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