Sunday, September 9, 2018

Sell Rosh Hashanah and Buy Yom Kippur

The Jewish holiday of Rosh Hashanah begins at sundown today, 9/9/18. The ole Wall Street adage is “Sell Rosh Hashanah, Buy Yom Kippur.” Yom Kippur begins at sundown on Tuesday, 9/18/18. Thus, seasonality-wise, stock market softness is expected over the next week or so.

Jewish folks reflect on their lives and actions during Rosh Hashanah and seek atonement for their sins. It is not a time to be focused on material possessions such as stocks so many Jews avoid the markets which typically subtracts away from bullishness in equities.

Last year, stocks were in a melt-up so the adage went down in flames. Not even a religious holiday could stop the wealthy from riding the bullish gravy train higher. Human greed rules. The Dow has fallen about -0.6% from Rosh Hashanah to Yom Kippur, on average, over the last 47 years.

During the 2008 stock market crash, equities were bludgeoned -21% during the Jewish holiday period. In reality, the period is a coin flip but it is something fun to watch over the next seven trading days.

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