Wednesday, January 2, 2013

1% Gaps Higher to Start the Month

Fiscal cliff news has the market set to gap up strongly this morning.  The 1st day of the month is often a strong one for stocks, but how has it done intraday when it gapped up big to begin with?  That is what I looked at this morning.

6 of the 9 instances since 2003 have closed above the open.  Gross gains have been about 2.2 times the size of gross losses, and the average trade rose a little over 0.4% from open to close.  But with instances low I wouldn’t put a lot of faith in these numbers.  Early indications favor more upside but it is certainly not a clear-cut edge.

1 comment:

cashonly said...

You might want to take into account the prior 2-3 days of trading as this is also part of seasonality. I wonder if you're less likely to have a move up intraday if there was an upside move the prior 2-3 days and now the market is "spent"