Two major market turning points since 2000 have occurred on that date. But the explanation isn’t spooky at all. Numerologically-oriented investors believe that the final top of the bull market could be this coming Friday, Oct. 9.
That’s because not just one, but two, major market turning points since 2000 have occurred on that day. One was the top of the bull market in 2007 that preceded the global financial crisis (in which the S&P 500 fell 56.8%), and the other was the bottom of the bear market after the dot-com bubble burst (the S&P 500 more than doubled over the subsequent four years). There’s nothing suspicious or mysterious about Oct. 9, however.
Given the number of major bull and bear markets that have occurred in U.S. history, it actually would have been unusual if several did **_not_** begin or end on the same month and day. Remember the birthday paradox from your mathematics class? It focuses on how many people need to be in a group before you should bet that two of them share the same birthday.
The answer, which almost everyone gets wrong, is just 23. Given that there have been 76 major market turning points since 1900 (according to the calendar maintained by Ned Davis Research), we should expect more than just one market turning point to share the same month and day. And sure enough, there are: Besides Oct. 9, there is Jan. 5, Apr. 28 and Sep. 21.
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This focus on Oct. 9 comes on top of a widespread belief that the entire month of October is somehow jinxed. Jeffrey Hirsch of the Stock Traders Almanac Newsletter refers to this as “Octoberphobia.” Hirsch focuses on major market turning points since World War II, and it certainly appears as though he has a point. Of the 48 major market turning points that have occurred since WWII (in the Ned Davis Research calendar), seven have taken place in October — double what that number would be if the turning points were spread equally across all months.
Extract — continue reading at the source.
