When Smith first cut graphs of market prices into ten-year segments and placed them above one another, he observed that each decade tended to have three bull market cycles and that the l
Trang 1NASDAQ COMPOSITE MARKET PROBABILITY CALENDAR 2005
% CHANCE OF THE MARKET RISING ON ANY TRADING DAY OF THE YEAR
(Based on the number of times the NASDAQ rose on a particular trading day during January 1971-December 2003 )
Date Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1 H 66.7 63.6 39.4 S 57.6 54.6 51.5 54.6 S 69.7 63.6
2 S 69.7 60.6 S 57.6 78.8 S 39.4 66.7 S 48.5 60.6
3 51.5 63.6 75.8 S 72.7 63.6 S 48.5 S 48.5 75.8 S
4 75.8 66.7 54.6 60.6 63.6 S H 63.6 S 63.6 54.6 S
5 60.6 S S 60.6 54.6 S 51.5 63.6 H 54.6 S 63.6
6 66.7 S S 54.6 54.6 60.6 42.4 S 60.6 63.6 S 57.6
7 51.5 51.5 57.6 54.6 S 57.6 51.5 S 57.6 63.6 42.4 45.5
8 S 51.5 60.6 63.6 S 45.5 63.6 39.4 57.6 S 51.5 51.5
9 S 48.5 60.6 S 57.6 45.5 S 51.5 42.4 S 63.6 42.4
10 60.6 63.6 51.5 S 57.6 60.6 S 54.6 S 60.6 63.6 S
11 54.6 54.6 72.7 66.7 42.4 S 63.6 57.6 S 45.5 48.5 S
12 60.6 S S 57.6 57.6 S 60.6 63.6 42.4 51.5 S 42.4
13 66.7 S S 54.6 60.6 63.6 72.7 S 57.6 75.8 S 45.5
14 72.7 60.6 48.5 66.7 S 60.6 75.8 S 54.6 63.6 57.6 36.4
15 S 60.6 57.6 54.6 S 51.5 66.7 57.6 36.4 S 39.4 45.5
16 S 48.5 66.7 S 60.6 48.5 S 51.5 39.4 S 42.4 57.6
17 H 57.6 51.5 S 54.6 48.5 S 54.6 S 48.5 54.6 S
18 69.7 39.4 63.6 60.6 51.5 S 45.5 51.5 S 48.5 51.5 S
19 63.6 S S 60.6 45.5 S 45.5 36.4 54.6 36.4 S 54.6
20 48.5 S S 51.5 54.6 48.5 54.6 S 66.7 72.7 S 54.6
21 51.5 H 39.4 54.6 S 60.6 45.5 S 51.5 39.4 54.6 57.6
22 S 48.5 60.6 54.6 S 48.5 54.6 63.6 57.6 S 66.7 66.7
23 S 57.6 54.6 S 48.5 51.5 S 57.6 45.5 S 60.6 66.7
24 54.6 57.6 36.4 S 57.6 51.5 S 51.5 S 42.4 H S
25 42.4 54.6 H 48.5 48.5 S 57.6 51.5 S 33.3 57.6 S
26 66.7 S S 51.5 57.6 S 48.5 57.6 51.5 39.4 S H
27 57.6 S S 69.7 51.5 42.4 48.5 S 45.5 54.6 S 72.7
28 60.6 60.6 51.5 60.6 S 57.6 48.5 S 45.5 57.6 69.7 54.6
29 S 54.6 75.8 S 69.7 57.6 54.6 48.5 S 66.7 72.7
30 S 48.5 S H 75.8 S 60.6 51.5 S 69.7 87.9
Based on NASDAQ composite, prior to February 5, 1971, based on National Quotation Bureau indices
Trang 2DOW JONES INDUSTRIALS MARKET PROBABILITY CALENDAR 2005
% CHANCE OF THE MARKET RISING ON ANY TRADING DAY OF THE YEAR
(Based on the number of times the DJIA rose on a particular trading day during January 1953-December 2003 )
Date Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1 H 54.9 66.7 56.9 S 54.9 62.8 45.1 62.8 S 64.7 45.1
2 S 54.9 70.6 S 54.9 52.9 S 45.1 58.8 S 51.0 56.9
3 56.9 39.2 58.8 S 62.8 56.9 S 45.1 S 49.0 68.6 S
4 74.5 51.0 51.0 54.9 52.9 S H 54.9 S 62.8 54.9 S
5 49.0 S S 51.0 49.0 S 64.7 56.9 H 51.0 S 62.8
6 54.9 S S 60.8 43.1 56.9 60.8 S 58.8 58.8 S 58.8
7 47.1 43.1 45.1 54.9 S 52.9 56.9 S 43.1 49.0 41.2 45.1
8 S 41.2 56.9 58.8 S 39.2 62.8 45.1 47.1 S 60.8 41.2
9 S 43.1 60.8 S 49.0 35.3 S 47.1 41.2 S 54.9 52.9
10 47.1 60.8 52.9 S 51.0 58.8 S 52.9 S 52.9 60.8 S
11 45.1 43.1 54.9 62.8 47.1 S 54.9 47.1 S 39.2 43.1 S
12 49.0 S S 62.8 49.0 S 51.0 64.7 51.0 39.2 S 58.8
13 58.8 S S 56.9 54.9 58.8 35.3 S 56.9 56.9 S 41.2
14 56.9 51.0 49.0 72.6 S 54.9 64.7 S 45.1 58.8 49.0 49.0
15 S 52.9 60.8 62.8 S 49.0 47.1 56.9 52.9 S 56.9 47.1
16 S 35.3 62.8 S 52.9 49.0 S 51.0 49.0 S 49.0 58.8
17 H 49.0 54.9 S 43.1 49.0 S 41.2 S 52.9 51.0 S
18 58.8 52.9 51.0 54.9 54.9 S 45.1 54.9 S 51.0 49.0 S
19 41.2 S S 54.9 47.1 S 47.1 45.1 39.2 43.1 S 52.9
20 37.3 S S 49.0 49.0 43.1 47.1 S 47.1 62.8 S 54.9
21 41.2 H 39.2 45.1 S 52.9 45.1 S 45.1 39.2 62.8 54.9
22 S 37.3 49.0 49.0 S 51.0 47.1 58.8 45.1 S 66.7 47.1
23 S 47.1 37.3 S 31.4 43.1 S 51.0 43.1 S 58.8 62.8
24 47.1 60.8 47.1 S 54.9 41.2 S 49.0 S 49.0 H S
25 56.9 47.1 H 51.0 39.2 S 58.8 49.0 S 27.5 64.7 S
26 58.8 S S 58.8 43.1 S 54.9 45.1 51.0 49.0 S H
27 49.0 S S 52.9 51.0 49.0 47.1 S 54.9 56.9 S 70.6
28 64.7 52.9 47.1 47.1 S 45.1 60.8 S 47.1 60.8 56.9 51.0
29 S 56.9 54.9 S 54.9 56.9 51.0 47.1 S 52.9 58.8
30 S 39.2 S H 54.9 S 43.1 41.2 S 52.9 58.8
Trang 3S&P 500 MARKET PROBABILITY CALENDAR 2005
% CHANCE OF THE MARKET RISING ON ANY TRADING DAY OF THE YEAR *
(Based on the number of times the S&P 500 rose on a particular trading day duringJanuary 1953-December 2003)
* See new trends developing on pages 60, 88 and 136
Date Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1 H 56.9 60.8 60.8 S 52.9 68.6 47.1 62.8 S 64.7 49.0
2 S 56.9 64.7 S 54.9 60.8 S 43.1 56.9 S 52.9 52.9
3 47.1 51.0 60.8 S 70.6 56.9 S 47.1 S 49.0 70.6 S
4 74.5 45.1 47.1 54.9 58.8 S H 54.9 S 70.6 51.0 S
5 51.0 S S 51.0 43.1 S 60.8 58.8 H 52.9 S 60.8
6 47.1 S S 56.9 41.2 54.9 52.9 S 58.8 60.8 S 58.8
7 43.1 47.1 47.1 56.9 S 51.0 60.8 S 43.1 51.0 43.1 41.2
8 S 41.2 58.8 60.8 S 39.2 62.8 43.1 51.0 S 60.8 47.1
9 S 39.2 60.8 S 51.0 41.2 S 52.9 49.0 S 64.7 52.9
10 49.0 62.8 49.0 S 49.0 60.8 S 49.0 S 51.0 58.8 S
11 49.0 49.0 62.8 62.8 51.0 S 52.9 47.1 S 37.3 43.1 S
12 54.9 S S 51.0 47.1 S 49.0 66.7 51.0 45.1 S 47.1
13 60.8 S S 51.0 54.9 62.8 45.1 S 60.8 54.9 S 45.1
14 64.7 43.1 45.1 62.8 S 54.9 72.6 S 49.0 52.9 51.0 41.2
15 S 51.0 64.7 60.8 S 52.9 54.9 60.8 52.9 S 51.0 47.1
16 S 33.3 62.8 S 54.9 47.1 S 52.9 51.0 S 49.0 58.8
17 H 52.9 52.9 S 47.1 54.9 S 49.0 S 51.0 54.9 S
18 52.9 45.1 51.0 54.9 56.9 S 43.1 52.9 S 54.9 52.9 S
19 52.9 S S 52.9 41.2 S 43.1 45.1 47.1 39.2 S 47.1
20 47.1 S S 52.9 54.9 39.2 47.1 S 52.9 68.6 S 45.1
21 45.1 H 45.1 49.0 S 51.0 43.1 S 51.0 35.3 60.8 51.0
22 S 43.1 43.1 43.1 S 54.9 43.1 56.9 52.9 S 64.7 45.1
23 S 39.2 52.9 S 41.2 43.1 S 49.0 39.2 S 60.8 60.8
24 60.8 56.9 39.2 S 52.9 39.2 S 49.0 S 41.2 H S
25 51.0 51.0 H 47.1 43.1 S 56.9 47.1 S 33.3 68.6 S
26 52.9 S S 58.8 43.1 S 54.9 43.1 49.0 56.9 S H
27 45.1 S S 49.0 51.0 39.2 51.0 S 52.9 60.8 S 70.6
28 66.7 60.8 49.0 45.1 S 51.0 62.8 S 54.9 58.8 58.8 54.9
29 S 56.9 60.8 S 58.8 68.6 51.0 49.0 S 56.9 66.7
30 S 33.3 S H 51.0 S 47.1 45.1 S 51.0 70.6
Trang 4RECENT S&P 500 MARKET PROBABILITY CALENDAR 2005
Date Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1 H 47.6 47.6 57.1 S 61.9 81.0 42.9 47.6 S 76.2 57.1
2 S 57.1 61.9 S 57.1 71.4 S 42.9 47.6 S 42.9 57.1
3 38.1 66.7 61.9 S 71.4 57.1 S 47.6 S 57.1 61.9 S
4 71.4 38.1 47.6 52.4 52.4 S H 52.4 S 61.9 57.1 S
5 52.4 S S 42.9 28.6 S 52.4 61.9 H 42.9 S 57.1
6 47.6 S S 61.9 28.6 52.4 38.1 S 47.6 57.1 S 33.3
7 42.9 47.6 47.6 47.6 S 42.9 57.1 S 38.1 38.1 33.3 42.9
8 S 47.6 61.9 61.9 S 28.6 61.9 47.6 52.4 S 57.1 47.6
9 S 38.1 47.6 S 52.4 47.6 S 42.9 47.6 S 52.4 47.6
10 52.4 71.4 42.9 S 61.9 52.4 S 52.4 S 52.4 57.1 S
11 42.9 61.9 61.9 57.1 52.4 S 38.1 42.9 S 23.8 42.9 S
12 57.1 S S 47.6 66.7 S 57.1 71.4 47.6 42.9 S 42.9
13 52.4 S S 52.4 66.7 57.1 66.7 S 52.4 76.2 S 42.9
14 76.2 47.6 42.9 61.9 S 66.7 85.7 S 57.1 71.4 66.7 33.3
15 S 66.7 71.4 66.7 S 57.1 47.6 57.1 47.6 S 47.6 47.6
16 S 28.6 66.7 S 57.1 61.9 S 66.7 47.6 S 47.6 66.7
17 H 38.1 52.4 S 42.9 57.1 S 57.1 S 57.1 61.9 S
18 61.9 42.9 57.1 57.1 66.7 S 47.6 61.9 S 52.4 47.6 S
19 52.4 S S 47.6 52.4 S 42.9 47.6 42.9 38.1 S 52.4
20 33.3 S S 57.1 52.4 42.9 52.4 S 61.9 76.2 S 33.3
21 42.9 H 47.6 38.1 S 52.4 28.6 S 33.3 38.1 66.7 61.9
22 S 52.4 42.9 52.4 S 71.4 38.1 57.1 57.1 S 61.9 61.9
23 S 42.9 57.1 S 33.3 28.6 S 52.4 38.1 S 71.4 52.4
24 52.4 52.4 47.6 S 76.2 38.1 S 61.9 S 33.3 H S
25 52.4 57.1 H 33.3 52.4 S 81.0 47.6 S 47.6 71.4 S
26 47.6 S S 61.9 47.6 S 57.1 57.1 38.1 47.6 S H
27 57.1 S S 57.1 52.4 28.6 47.6 S 52.4 61.9 S 66.7
28 66.7 61.9 47.6 57.1 S 52.4 66.7 S 52.4 76.2 57.1 61.9
29 S 57.1 66.7 S 71.4 71.4 52.4 57.1 S 61.9 71.4
30 S 28.6 S H 47.6 S 42.9 52.4 S 33.3 47.6
% CHANCE OF THE MARKET RISING ON ANY TRADING DAY OF THE YEAR *
(Based on the number of times the S&P 500 rose on a particular trading day during January 1983-December 2003**)
* See new trends developing on pages 60, 88 and 136 ** Based on most recent 21-year period
Trang 526 27 28 29 30 31 1
♥
Market closed on shaded weekdays; closes early when half-shaded.
Mother’s Day
Martin Luther King Day
JANUARY
New Year’s Day
Ash Wednesday
Daylight Saving Time Begins
St Patrick’s Day
FEBRUARY
MARCH
APRIL
MAY
JUNE
Presidents’ Day
Passover Good Friday Easter
Father’s Day
JULY
2006 STRATEGY CALENDAR
(Option expiration dates encircled)
Memorial Day
Trang 63 4 5 6 7 8 9
AUGUST
SEPTEMBER
OCTOBER
NOVEMBER
DECEMBER
Rosh Hashanah
Yom Kippur
Columbus Day
Veterans’ Day
Thanksgiving Election Day
Chanukah
Labor Day
Independence Day
Daylight Saving Time Ends
2006 STRATEGY CALENDAR
(Option expiration dates encircled)
Trang 7THE TEN-YEAR STOCK MARKET CYCLE
Annual % Change In Dow Jones Industrial Average
Year Of Decade
1881-1890 3.0% – 2.9% – 8.5% –18.8% 20.1% 12.4% – 8.4% 4.8% 5.5% –14.1%
1891-1900 17.6 – 6.6 –24.6 – 0.6 2.3 – 1.7 21.3 22.5 9.2 7.0 1901-1910 – 8.7 – 0.4 –23.6 41.7 38.2 – 1.9 –37.7 46.6 15.0 –17.9
1911-1920 0.4 7.6 –10.3 – 5.4 81.7 – 4.2 –21.7 10.5 30.5 –32.9
1921-1930 12.7 21.7 – 3.3 26.2 30.0 0.3 28.8 48.2 –17.2 –33.8
1931-1940 –52.7 –23.1 66.7 4.1 38.5 24.8 –32.8 28.1 – 2.9 –12.7
1941-1950 –15.4 7.6 13.8 12.1 26.6 – 8.1 2.2 – 2.1 12.9 17.6 1951-1960 14.4 8.4 – 3.8 44.0 20.8 2.3 –12.8 34.0 16.4 – 9.3
1961-1970 18.7 –10.8 17.0 14.6 10.9 –18.9 15.2 4.3 –15.2 4.8 1971-1980 6.1 14.6 –16.6 –27.6 38.3 17.9 –17.3 – 3.1 4.2 14.9 1981-1990 – 9.2 19.6 20.3 – 3.7 27.7 22.6 2.3 11.8 27.0 – 4.3
1991-2000 20.3 4.2 13.7 2.1 33.5 26.0 22.6 16.1 25.2 – 6.2
2001-2010 – 7.1 –16.8 25.3
Total % Change 0.1% 23.1% 66.1% 88.7% 368.6% 71.5% – 38.3% 221.7% 110.6% – 86.9%
Avg % Change 0.01% 1.8% 5.1% 7.4% 30.7% 6.0% – 3.2% 18.5% 9.2% – 7.2%
Based on annual close; Cowles indices 1881-1885; 12 Mixed Stocks, 10 Rails, 2 Inds 1886-1889;
20 Mixed Stocks, 18 Rails, 2 Inds 1890-1896; Railroad average 1897 (First industrial average published May 26, 1896)
DECENNIAL CYCLE: A MARKET PHENOMENON
By arranging each year’s market gain or loss so the first and succeeding years
of each decade fall into the same column, certain interesting patterns emerge
— strong fifth and eighth years, weak seventh and zero years
This fascinating phenomenon was first presented by Edgar Lawrence
Smith in Common Stocks and Business Cycles (William-Frederick Press,
1959) Anthony Gaubis co-pioneered the decennial pattern with Smith When Smith first cut graphs of market prices into ten-year segments and placed them above one another, he observed that each decade tended to have three bull market cycles and that the longest and strongest bull markets seem
to favor the middle years of a decade
Don’t place too much emphasis on the decennial cycle nowadays, other than the extraordinary fifth and zero years, as the stock market is more influenced by the quadrennial presidential election cycle, shown on page 127 Also, the last half-century, which has been the most prosperous in U.S history, has distributed the returns among most years of the decade Interestingly, NASDAQ suffered its worst bear market ever in a zero year, giving us the rare experience of witnessing a bubble burst
Though fifth years are the strongest and have a twelve-and-zero winning streak, we don’t expect 2005 to be huge gainer year-over-year We look for perhaps one more surge to new recovery highs in early 2005 as the first bull cycle of the millennium runs its course Post-election years are historically the worst of the 4-year cycle (See post-election year column on page 127.)
Trang 8PRESIDENTIAL ELECTION/STOCK MARKET CYCLE
THE 171-YEAR SAGA CONTINUES
It is no mere coincidence that the last two years (pre-election year and election year) of the 43 administrations since 1833 produced a total net market gain of 742.8%, dwarfing the 227.6% gain of the first two years of these administrations Presidential elections every four years have a profound impact on the economy and the stock market Wars, recessions and bear markets tend to start or occur in the first half of the term; prosperous times and bull markets, in the latter half
*Party in power ousted **Death in office ***Resigned D—Democrat, W—Whig, R—Republican
1 Based on annual close; Prior to 1886 based on Cowles and other indices; 12 Mixed Stocks, 10 Rails, 2 Inds 1886-1889;
20 Mixed Stocks, 18 Rails, 2 Inds 1890-1896; Railroad average 1897 (First industrial average published May 26, 1896)
STOCK MARKET ACTION SINCE 1833 Annual % Change In Dow Jones Industrial Average 1
Total % Gain 67.9 % 159.7% 457.6% 285.2%
Trang 9Bear markets begin at the end of one bull market and end at the start of the next bull market (7/17/90 to 10/11/90 as an example) The high at Dow 3978.36 on January 31,
1994, was followed by a 9.7 percent correction A 10.3 percent correction occurred between the May 22, 1996, closing high of 5778 and the intraday low on July 16, 1996 The longest bull market on record ended on July 17, 1998, and the shortest bear market
on record ended on August 31, 1998, when the new bull market began The greatest bull super cycle in history that began 8/12/82 ended in 2000 after the Dow gained 1409% and NASDAQ climbed 3072% The Dow gained only 497% in the eight-year super bull from 1921 to the top in 1929 NASDAQ suffered its worst loss ever, down 77.9%, nearly as much as the 89.2% drop in the Dow from 1929 to the bottom in 1932
BULL AND BEAR MARKETS SINCE 1900
9/24/00 38.80 6/17/01 57.33 47.8% 266 – 46.1% 875 11/9/03 30.88 1/19/06 75.45 144.3 802 – 48.5 665 11/15/07 38.83 11/19/09 73.64 89.6 735 – 27.4 675 9/25/11 53.43 9/30/12 68.97 29.1 371 – 24.1 668 7/30/14 52.32 11/21/16 110.15 110.5 845 – 40.1 393 12/19/17 65.95 11/3/19 119.62 81.4 684 – 46.6 660 8/24/21 63.90 3/20/23 105.38 64.9 573 – 18.6 221 10/27/23 85.76 9/3/29 381.17 344.5 2138 – 47.9 71 11/13/29 198.69 4/17/30 294.07 48.0 155 – 86.0 813
2/27/33 50.16 2/5/34 110.74 120.8 343 – 22.8 171 7/26/34 85.51 3/10/37 194.40 127.3 958 – 49.1 386 3/31/38 98.95 11/12/38 158.41 60.1 226 – 23.3 147 4/8/39 121.44 9/12/39 155.92 28.4 157 – 40.4 959 4/28/42 92.92 5/29/46 212.50 128.7 1492 – 23.2 353 5/17/47 163.21 6/15/48 193.16 18.4 395 – 16.3 363 6/13/49 161.60 1/5/53 293.79 81.8 1302 – 13.0 252 9/14/53 255.49 4/6/56 521.05 103.9 935 – 19.4 564 10/22/57 419.79 1/5/60 685.47 63.3 805 – 17.4 294 10/25/60 566.05 12/13/61 734.91 29.8 414 – 27.1 195 6/26/62 535.76 2/9/66 995.15 85.7 1324 – 25.2 240 10/7/66 744.32 12/3/68 985.21 32.4 788 – 35.9 539 5/26/70 631.16 4/28/71 950.82 50.6 337 – 16.1 209 11/23/71 797.97 1/11/73 1051.70 31.8 415 – 45.1 694 12/6/74 577.60 9/21/76 1014.79 75.7 655 – 26.9 525 2/28/78 742.12 9/8/78 907.74 22.3 192 – 16.4 591 4/21/80 759.13 4/27/81 1024.05 34.9 371 – 24.1 472 8/12/82 776.92 11/29/83 1287.20 65.7 474 – 15.6 238 7/24/84 1086.57 8/25/87 2722.42 150.6 1127 – 36.1 55 10/19/87 1738.74 7/17/90 2999.75 72.5 1002 – 21.2 86 10/11/90 2365.10 7/17/98 9337.97 294.8 2836 – 19.3 45 8/31/98 7539.07 1/14/00 11722.98 55.5 501 – 29.7 616 9/21/01 8235.81 3/19/02 10635.25 29.1 179 – 31.5 204 10/9/02 7286.27 2/17/04 10714.88 47.1* 496* *At Press Time
Based on Dow Jones industrial average 1900-2000 Data: Ned Davis Research The NYSE was closed from 7/31/1914 to 12/11/1914 due to World War I.
DJIA figures were then adjusted back to reflect the composition change from 12 to 20 stocks in September 1916.
Trang 10DIRECTORY OF
TRADING
PATTERNS &
DATABANK
CONTENTS
130 A Typical Day In The Market
131 Through The Week On A Half-Hourly Basis
132 Monday Now Most Profitable Day Of Week
133 NASDAQ Days Of The Week
134 S&P Daily Performance Each Year Since 1952
135 NASDAQ Daily Performance Each Year Since 1971
136 Monthly Cash Inflows Into S&P Stocks
137 Monthly Cash Inflows Into NASDAQ Stocks
138 November, December, And January — Year’s Best Three Month Span
139 November Through June — NASDAQ’s Eight-Month Run
140 Standard & Poor’s 500 Monthly Percent Changes
142 Standard & Poor’s 500 Monthly Closing Prices
144 Dow Jones Industrials Monthly Percent Changes
146 Dow Jones Industrials Monthly Point Changes
148 Dow Jones Industrials Monthly Closing Prices
150 NASDAQ Composite Monthly Percent Changes
152 NASDAQ Composite Monthly Closing Prices
154 Best & Worst Dow Days
155 Best & Worst NASDAQ Days
156 Best & Worst Dow Weeks
157 Best & Worst NASDAQ Weeks
158 Best & Worst Dow Months
159 Best & Worst NASDAQ Months
160 Best & Worst Dow & NASDAQ Years