StockFetcher Forums · General Discussion · The Most Bizarre Market-Timing Chart Ever?<< >>Post Follow-up
485 posts
msg #121448
Ignore guru_trader
9/5/2014 3:39:09 AM

According to a paper by economists at UC Northwestern University and UC Berkeley, Anna Cieslak and Adair Morse and Annette Vissing-Jørgensen, another, even more surprising trading pattern using FOMC announcement has emerged. Specifically, anyone who engaged in the simple "even" strategy of buying the stocks of the S&P 500 on the day before a Fed policy announcement, selling them a week later, then buying them again the following week and sticking with the pattern until the subsequent Fed meeting generated a whopping 650% return since 1994, far outperforming the inverse "odd" strategy which shocking had a negative return over the past two decades years, and jsut as surprisingly, outperforming the market's own 505% return during this period.

Behold what may be the most bizarre pattern chart yet:

The Most Bizarre Market-Timing Chart Ever

As the WSJ adds, "the pattern of stocks performing better in even weeks of the Fed cycle—the week of the policy-setting meeting, two weeks after it, and so on—is persistent. Given financial markets' complexity, though, it is possible to find many interesting, significant-seeming patterns that are really just matters of chance."

The pattern appears robust, with clear peaks and valleys in returns during even and odd weeks that appear statistically significant. Splitting the data into three subperiods—1994 through 2000, 2001 through 2007 and 2008 onward—they found the pattern still held. International stock returns follow it as well.


4,738 posts
msg #121532
Ignore Eman93
9/17/2014 10:14:15 PM

Lets see the big move has been since "the Crash"..
The Fed has popped the market every time! The next week traders take profits it pulls back that week and then they buy it when it hits support!
Not that surprising when you study charts.

StockFetcher Forums · General Discussion · The Most Bizarre Market-Timing Chart Ever?<< >>Post Follow-up

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