The January Effect is kind of a "misnomer" since mutual funds end their fiscal year on OCTOBER 31st. As a result, the January "effect" has a tendency to happen much earlier. With funds cleaning out their portfolio, and tax-loss candidates having been shed by the end of October, this is what has made November and December so seasonally strong. Since there have not been many "losers" in this year's market, especially with the S&P small and mid-cap indexes hitting ALL-TIME HIGHS, I would not invest too much in this theory for this year. Just my 2 cents.
WTG, OT! Blue Horeshoe: A little advice. Being able to tap into the wisdom of Oldtrader is the reason to be on this board.
Horeshoe, Why spread this bet? Just run a scan for low priced / low rs piece of shits that do not have much big money participation... PEACE and good-specul8tion
Thanks ... been busy doing that actually. Lot's of crap to wade through, have found a few to punt w/ ... these flyers not my usual game. Why hedge? Well, because I want to specifically capture upside in volatile small caps during December/January. At the same time, upside for some large caps like MSFT, GE, look considerably less promising. Third, I much prefer the P/L profile of spreads as they tend to smooth out volatility and reduce drawdowns. And finally, if I long/short the right futures I should be able to get some very favorable margining that could really allow me to leverage up ... though I haven't done this before & need to check.
Ahhh ... the back slapping comfort of the herd is so seductive. I do respect Oldtrader, but regardless of his inclinations I'll be picking my spot to leverage quite long as year-end approaches. The risks are being too late, hanging around too long, and succumbing to consensus thinking. Pabst - if you want to pal around w/ some bears you might post on the 'How high can the S&P go?' thread. You'll find some real cameraderie among like-minds there.
Horseshoe, Old did not say he was bearish, he said he didn't think there would much of jan/dec effect this year. He also threw you a bone, but so far you have not thanked him -- healthcare sector or others that have not participated in much of the 03' rally... PEACE and good-specul8tion
Anybody feel like big money is desperately trying to keep this heavy market afloat so that they can lock in these gains???