Seasonality and the Tuesday Lesson

How should traders and investors take advantage of seasonal patterns?

There are so many opportunities for dividing the calendar!  This year, the best has been to go long on Tuesday.  Here is the 2014 summary from the Bespoke Team:

avg daily change day of the week1


You could have done even better if you had sold short on the other days of the week.


You might well be skeptical about this easy system.  When I offered it for comment to the Scutify community they suggested that there were not enough cases and that it did not make sense.   Market veteran Robert Marcin suggested that this pattern would quickly be learned by the market.  Monday buying would anticipate the Tuesday effect, and it would quickly disappear.

In fact, prior years have had different days as the best performers.

So far, so good.  There have been eighteen Tuesdays to establish and test a pattern.

  1. There was no a priori hypothesis
  2. There is no “out of sample” data that could be used for a test
  3. The results are “data mining” covering a specific time period.

Those who are skeptical are fully justified.  The pattern broke down last week.


Let us take the conclusions and find a new setting.  How about the Presidential Election cycle.  This is getting a lot of buzz as “experts” opine about why the second year of the second term should be bad.  How many cases are there?  If you wanted to get 18  (the same number for this year’s Tuesdays), you would need to go back 144 years.  Would that really be relevant?

We have better data on the “Tuesday effect” than we have on the oft-touted Presidential Election Cycle.

Most of those discussing seasonality violate all three of the points listed above.

Challenge for the Seasonality Crowd

Why hasn’t the market “learned” this behavior and adjusted?

Did any of those parroting “sell in May” advise you to “buy in October” last year?

[Note to readers.  I have had several suggestions about improving the blogging platform, the graphic images, and the ability to deal with comments.  While people have expressed appreciation about the content, they have requested a better platform.  This is a “test post” on my new site.  Comments are very welcome.  Send to main at newarc dot com. Please bear with me as I work out the kinks.  Thanks!]


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  • Joe May 14, 2014  

    The open airey “lots of white space” and delicate font appearance looks modern and uncluttered. But for transmitting data and getting a lot on each screen refresh it falls short. Gimme more density and more contrast to make it readable.

  • Joe May 14, 2014  

    Compare the last old post and the new one. Scale the data of the WTWA into the new format. Lotta scrolling…..

  • andrew May 14, 2014  

    Is it possible to have darker font. I am having a hard time reading it.

  • Warren Richards May 16, 2014  

    Agreed with Andrew…the present font is ‘faint’ (resembles faint text used as background for more important content).

  • Warren Richards May 16, 2014  

    Jeff, I’ve been following your SA articles for years…if you write it, I’ll read it!