Wednesday, September 5, 2012

The September Effect

I did an analysis of how the markets behaves in September for the past 11 years and the results are pretty startling.



1. In the early  past of this millennium in 2000 and 2001, the markets tanked very heavily.

2. The market has given very positive returns in 6 of the years.

3. Overall, 5 negative and 6 positive Septembers. Also, 1 has been very marginal negative year.

What can one conclude?

5258 was the August closing. Keeping a buffer of couple of percent, we can go long in the 5150-5200 band. 8 times out of 11 year, one would have made money with this strategy.

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