By the Numbers: Voyaging for Columbus Day Clues

Can Columbus Day returns offer clues to stocks' end-of-year momentum?

Oct 12, 2015 at 3:01 PM
facebook twitter linkedin

U.S. stocks are modestly higher this Columbus Day, despite light volume. Should the major market indexes end in the black, it will not only extend the Dow Jones Industrial Average's (DJIA) longest winning streak of the year, it will also jive with the historical norm. Against this backdrop, I employed Schaeffer's Senior Quantitative Analyst Rocky White to crunch the numbers on whether Columbus Day returns can provide any clues about the market's rest-of-year trajectory.

Since 1995, Columbus Day has been positive for the S&P 500 Index (SPX) 60% of the time -- higher than average (54%). What's more, the average one-day return is 0.7%, compared to an anytime average gain of just 0.04%. 


Surprisingly, the biggest Columbus Day gain came in the heart of the financial crisis, with the SPX advancing 11.6% on Oct. 13, 2008. The biggest loss of the past 20 years came last year, in fact, with the SPX surrendering 1.7%.

Following a positive Columbus Day, the broad-market barometer has ended the week higher more than two-thirds of the time. What's more, the index moved higher through the end of the year 92% of the time.

When the SPX has endured a negative Columbus Day, it's enjoyed a positive week just half the time, and has moved higher through the end of the year 63% of the time -- a 29-percentage-point difference compared to a positive Columbus Day.


While this sample size is relatively small and there are other factors to consider -- perhaps the broad-market trajectory leading up to the federal holiday, or fundamental developments after -- it's always more fun to root for the bulls, right?


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!



Special Offers from Schaeffer's Trading Partners