Wednesday, April 29, 2009

Norm! Seasonal Timing System

Just a reminder of another seasonal timing strategy from Norman Fosback.  I don't know if he's updated it on his website lately, but here is my understanding of it.

End of Month

  • Always own equities on the last trading day of each month and first four trading days of each month (the “month-end” period).
  • If the next-to-last trading day of the month is anything other than the first trading session of the week, hold equities on that day, too. In other words, own equities on both of the last two trading days of the month except when the next-to-last trading day of the month is the first trading day of the week.
  • Also hold equities on the fifth trading day of the month, unless that fifth day is the first day of the week.

Market Holidays

  • Own equities on the two trading days before each holiday closing (the “pre-holiday” period).
  • However, do not own equities on the second day before a holiday closing if that day happens also to be the first trading day of the week.
  • Continue to own equities on the first day after a market holiday closing if that day is also the last trading day of the week. Making Seasonality Even Better Over the years, Monday has been a poor day to be invested in the stock market.

Mark Hulbert at CBS Marketwatch last wrote about Fosback's system in November.  Of course, who knows how it will work out this month or going forward. But it's out there. Something to distract us from the Swine Flu. 

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