One of the oldest adages in the stock market is to ‘sell on Rosh Hashanah and buy on Yom Kippur.” For those not familiar with Jewish custom (disclosure: I am Jewish) , Rosh Hashanah marks the start of the Jewish New Year while Yom Kippur is a Day of Atonement for all of one’s sins. Thus, it is actually a very serious period. The time between the two holidays are called the High Holy Days because this is the period in which G-d is supposed to review what one has done the last year, to decide whether one will live or die in the next year, and so forth. So, the folk adage is that the mood is much more serious thus stocks tend to not do really well during this time. Furthermore, there was a belief of some Jewish traders many years ago that they should focus their attention on their religion rather than the markets during this time thus they’d theoretically sell all of their stocks. This notion doesn’t really make a great deal of sense as it’s not a requirement to spend every minute on religion during the days between the two major holidays. Furthermore, many Jews have become quite assimilated over the generations in America. I did a little homework to see how true this actually is. A reporter from Seeking Alpha (Cleve Rueckart) did a 91-year study of the performance of the Dow Jones Industrial Average during the period of the last close before Rosh Hashanah to the last close before Yom Kippur and then did a comparison of the performance of the Dow until the end of the Gregorian calendar year (December 31). Actually, the Dow gained 0.62% from Rosh Hashanah to Yom Kippur while gaining 1.99% from Yom Kippur to the end of the year! Last year, the Dow fell 1.6% during the High Holy Days while the Dow gained 7.89% through new Year’s Eve. In 2008, the numbers were a drop of 8.93% during the High Holy Days while the drop was 5.38% thereafter through New Year’s Eve. So, the bottom line is that there definitely seems there is something to all of this after all but I certainly wouldn’t use it as a guide if you’re trading day-to-day as obviously many other factors will be coming into play on any given day during this ‘holy’ upcoming period…much less the rest of the year.
Markets in Asia were generally higher overnight with Tokyo up 1.5% and Hong Kong ahead 0.4%. In Europe, the trend is a tinge lower with London down 0.2% and Frankfurt off 0.5%. Gold, currencies, and bonds are quiet but oil is notably ahead by 1.5%. Futures are modestly higher in a continuation of the recent rally. Wholesale inventories are the only number on the economic docket- due out at 10AM. Look for another very quiet session today with a continual bias to the upside. The focus will be on big-cap techs, selected microcaps, the financials to see if there is follow-through from yesterday, and the shoe sector after yesterday’s downdraft.
Reiterating-
If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified.
If something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-
Good- The following stocks have good news and/or a strong technical pattern
SOHU- closed near a high
MCD- notable island reversal in closing near day’s high after reporting disappointing same-store sales data
ADBE- closed near a high after AAPL loosened its policies about the development of applications on its products
VHC- closed near intra-day high
LULU- decent earnings
Bad-The following stocks have bad news and/or a weak technical pattern
GFC- closed near a low
SCOK- closed near a low after filing some regulatory data
UCTT- closed near a low
GFRE- closed near a low
CROX, SKX- closed near a low after a negative report on sector out of Susquehana
SWHC- poor earnings
NSM- poor earnings
TXN- slightly disappointing earnings outlook
AAPL- reversed in closing near day’s low
JKS- closed near low of day
CAGC- closed near low of day
CHBT- closed near low of day
MA- closed near low of day
Earnings:
FRI SEP 10 BEFORE
LULU
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner
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