The New Year is almost here, only one trading day left 2007. On Friday, Dec. 28, the S&P 500 Index (SPX) and Gold Futures (GC) both closed up. Gold has been shining over the last week closing up the past four trading days.
Will an up day for both the SPX and gold, two days before the New Year have a affect on SPX in 2008?
Q: What is the historical performance of S&P 500 Index (SPX) over the next 10 trading days two days before New Years and both the SPX and gold futures are up?
A: According to the 8 previous occurrences of this event, SPX has shown a strong bearish edge that peaks 7 trading days after the event. Thus, the projected date for the peak of the bearish edge relative to the most recent occurrence of the event (Friday, Dec. 28, 2007) is Wednesday, Jan. 9, 2008.
SPX declines in 88% of the cases (7 of 8) by an average of -3.0% relative to the close on the event date. The average of the one rally is 1.1%. The overall return of the 8 cases is -2.5%, which, based on the close of SPX on the event date (1478.49), provides a target price of 1441.53 on Wednesday, Jan. 9, 2008.
If you would like to see more details of this historical edge, go to www.markethistory.com
Travis Nadelhoffer is an analyst with MarketHistory.com and an account representative with Logical Information Machines.
