96
MASSIVE S&P 500 GAINS HALLOWEEN TO CHRISTMAS
Here it is folks, the beginning of the best six months of the year to go long equities.
October has been considered, on average, the best time to go long stocks with the
reputation of having tremendous crashes, “acting as the bear market killer”.
October has a spooky history that has scared many strong-willed and financially sound
investors and traders with the likes of the fabled Friday the 13th crash in 1989, or the
earlier double whammy, back to back debacles in 1978 and 1979. Once again, as an avid
futures trader who was around and trading during the crash in 1987, John can testify that
October can be a scary month, yet a lucrative one for the well informed trader.
As is published in the Stock Traders Almanac,
October can be a time to buy depressed stocks.
This may be what helps in this situation, going
long the March futures contract on or about
October 27 and holding until December 27. Once
again, due to the length of the holding period, we
have featured this trade entering the next-month
futures contract as opposed to the front-month
December contract, which one would need to roll
into the March contract due to expiration.
The success rate is a whopping 75.0%,
registering a cumulative gain of $216,038 per one
lot futures contract. This is the Commodity Trader
Almanacs highest dollar amount winner by far. In
fact, even during the worst of times in 2008, we
registered a nice return of $7,825. The best gain was
in 1999 with a profit of $38,975, and the worst loser
was in 2000 with a loss of only $13,600. In the last
28 years, we have had 21 wins and only 7 losses.
This is a trade well worth considering, and of
course, there are several ways to participate:
full-futures contracts, the e-mini electronic
futures, the exchange-traded fund, SPDR S&P
500 (SPY), or in fact, devising a bullish option
stra tegy on these products. See pages 133–138
for additional correlated trades.
ENTRY EXIT PROFIT/
YEAR DATE CLOSE DATE CLOSE LOSS
1982 10/27 135.75 12/27 144.70 $2,238
1983 10/27 169.10 12/28 167.40
–425
1984 10/25 171.95 12/24 171.15 –200
1985 10/25 189.05 12/24 209.25 5,050
1986 10/27 240.05 12/24 248.30 2,063
1987 10/27 229.75 12/24 253.30 5,888
1988 10/27 282.15 12/27 280.00
–537
1989 10/26 343.65 12/26 350.45 1,700
1990 10/25 314.10 12/24 331.20 4,275
1991 10/25 387.60 12/24 400.90 3,325
1992 10/27 418.30 12/24 440.65 5,587
1993 10/27 466.65 12/27 471.65 1,250
1994 10/27 470.40 12/27 466.00
–1,100
1995 10/26 583.35 12/26 619.55 9,050
1996 10/25 711.75 12/24 759.05 11,825
1997 10/27 884.40 12/24 942.20 14,450
1998 10/27 1084.10 12/24 1239.50 38,850
1999 10/27 1321.90 12/27 1477.80 38,975
2000 10/26 1391.30 12/26 1336.90
–13,600
2001 10/25 1104.70 12/24 1147.20 10,625
2002 10/25 898.50 12/24 891.50
–1,750
2003 10/27 1029.20 12/24 1092.90 15,925
2004 10/27 1126.00 12/27 1208.40 20,600
2005 10/27 1189.70 12/27 1264.00 18,575
2006 10/26 1404.70 12/26 1428.80 6,025
2007 10/25 1534.90 12/24 1506.60
–7,075
2008 10/27 833.70 12/24 865.00 7,825
2009 10/27 1055.50 12/24 1122.00 16,625
28-Year Gain $216,038
OCTOBER LONG S&P 500 (MARCH)
TRADING DAY: 19—HOLD: 41 DAYS
Chart courtesy TradeNavigator.com
S&P 500 (SP) BARS AND SPDR S&P 500 (SPY) CLOSES
(WEEKLY DATA JANUARY 2009–MAY 2010)
S&P 500 Seasonal Pattern since 1982
c01_CTA_2011_pgs_12-119_c01_cta_2011_pgs_12-119 7/21/10 2:03 PM Page 96
MONDAY
17
TUESDAY
18
WEDNESDAY
19
THURSDAY
20
FRIDAY
21
SATURDAY
22
SUNDAY
23
OE:
CL(X)
LT:
CL(X)
OE:
S(X)
With enough inside information and a million dollars, you can go broke in a year.
— Warren Buffett (CEO Berkshire Hathaway, investor and philanthropist, b. 1930)
Entrepreneurs who believe theyre in business to vanquish the competition are less successful
than those who believe their goal is to maximize profits or increase their companys value.
— Kaihan Krippendorff, (Professor of entrepreneurship at Florida International University)
The dissenter (or contrary investor) is every human at those moments of his life
when he resigns momentarily from the herd and thinks for himself.
Archibald MacLeish (American poet, writer, and political activist, 1892–1982)
A generation from now, A mericans may marvel at the complacency that assumed
the dollars dominance would never end.
— Floyd Norris (Chief financial correspondent, NY Times, 2/2/07)
It isn’t as important to buy as cheap as possible as it is to buy at the right time.
— Jesse Livermore (Early 20th century stock trader and speculator, How to Trade in Stocks, 1877–1940)
Start Short Yen(H)—61.8% Accuracy Since 1976—End Feb. 9 , 2012—Page 88
End Long Natural Gas(X) (Jul. 26)
OCTOBER
c01_CTA_2011_pgs_12-119_c01_cta_2011_pgs_12-119 7/21/10 2:03 PM Page 97

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