Trading around Thanksgiving has a bullish tendency that was first published in the 1987 Stock Trader’s Almanac.
For 35 years prior to 1987, the Wednesday before and the Friday after Thanksgiving combined were up 33 times. The only declines were in 1964 and 1965. Subsequently, this trend changed. In the 26 years since 1987, there have been 11 declines and 15 advances. The best short-term trade appears to go long into weakness today or on Monday of Thanksgiving week and selling into any subsequent rally by the end of Thanksgiving week, but remain nimble as events like Greece’s debt crisis in 2011 can cancel Thanksgiving on Wall Street. Also of note is the change in the year-end rally. Prior to 1987, from the close of trading on the Friday after Thanksgiving to year-end, the DJIA rallied only 18 times in 35 years. As Thanksgiving bullishness lost steam in 1987, the rally afterwards occurred more frequently. Since 1987, DJIA has logged gains in 21 of 26 years from the close on Friday after Thanksgiving to year-end. By: Christopher Mistal