Jan 1:  Our quarterly data is in.  According to our data, the period was up 13.3%.

Stocks with large third quarter losses top our list of gainers, up 29%.  Volatile stocks were strong in general.  Note, however, that no industry groups at all found their way into our non-risk-adjusted tables.  The gains this quarter were not so much about industry groups.

On the weak side of the tables, oils gained about 6%.  Non-volatile stocks in general were weak, though they actually performed quite well after risk-adjustment.  In other words, they lagged the market in general, but they still performed better than what one might expect in a positive environment such as this.  

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We have our data for the full year 2004. The Russell 3000 gained 10%, and the Dow 3%.

The story of the year was oils, spurred on by turmoil in the Mideast, market forces, and the possible realization that supply will indeed peak before much longer.  The group gained 39%...going with volatile oils would have produced even higher gains.  Not far behind was metals and mining, with 36% gains.  Stocks that were rather weak in December 2003 fared nicely...note that this grouping does not include oils, which performed well in that period.  Note that stocks with poor finishes in December 2002, 2000, 1996, and 1995 performed nicely in the next year. 

On the weak side, semiconductors lost 18%.  Volatiles, stocks with big gains in 2003, and software were also weak. 

Cheap stocks, a group we always pay attention to for nice yearly gains, gained 12%...nothing spectacular.

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We've got our monthlong data for December.  Our own non-weighted sampling of the market has it up 3.7%.

Stocks that came into the month with large 3 month losses topped our list of gainers...up 12.5%.  One year losers gained 12.2%.  Cheap stocks were strong, particularly those that are volatile.  Junky stocks, as measured by high p/e ratios, fared well.  After risk-adjustment, large-caps performed well.

On the losing side, only oils showed a loss...down 1.7%.  Banks, and metals and mining were also weak, though they managed to eke out gains.  Stocks that came into December with nice gains over the last 5 to 60 days were weak.

In terms of matching December 2004 to historical Decembers, nothing seems to offer a decent fit.  2001 and 2003 showed gains in 3 month and yearlong losers, but also contradict some of the above trends.

Given the fact that we've already seen nice recent gains in yearlong losers and cheap stocks, one wonders about the prospects for a "January Effect".  Here, we should note that Dec 2003 saw nice gains in 1 year losers, while the group performed on par with the market in Jan 2004.  Dec 2001 saw nice gains in 3 month losers, while yearlong losers performed rather weakly in Jan 2002.  A tad of evidence that perhaps we shouldn't expect monster gains from yearlong losers in the next month.

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As for the second half of December, it was up 1.7%.

Stocks with a large book value with respect to stock price gained about 4.5%...a rather odd result, though not particularly significant.  Stocks with losses over the last 1 month to 1 year fared well, as did cheap stocks.

On the losing side, nothing of any significance emerged...stocks with large gains over the last month were weak, as were stocks with low institutional holdings.  Banks were weak...the only industry group, in fact, that appeared in the tables for the period.

Dec 31:  We added a 3 year chart (2002-2004) of Dow performance to our page of 3 year charts.  Going back to 1970, the best resemblance would probably be the 1974-1976 period.  1977 was a lousy market year, though we wouldn't make too much of this observation.

Sorry about the quality of charts on that page...at some point we'll clean things up and try to be more consistent about presentation...but it's not a high priority at the moment.

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Trading on the last day of the year was extremely sedate, even in comparison with previous last days of the year.  The Dow lost .2%, Nasdaq lost .1%, and separation between groups came in at a miniscule 1.3%...as low as we've ever seen it.

Despite the lack of trading opportunities, some trends of significance manifested.  In particular, stocks with poor recent performances gained as much as .6%...weighed against the average stock, this trend was actually worth noting.  One month and three month losers were relatively strong.  Oils gained.

On the losing side, stocks with low institutional coverage were weak, losing as much as .7%.  Hmmm...why is it that our "institutional" indicators always seem to make appearances in our tables at the end of the month?  Expensive stocks were weak, as were those with strong recent performances.  Banks lost.

The above trends are neutral for the next trading session.  Given the new year, the upcoming weekend, and the directionless trading activity today, one wouldn't expect today's activity would have much effect on the next session anyway.

It's the end of the year...Happy New Year!  The next day or so will be a busy time for us, as we update our tests and seasonal summaries.  Stay tuned.

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About a month ago we began the process of adding a new section to our website whereby we would analyze the seasonal patterns of various industry groups, as opposed to the entire market.  We got sidetracked, and hope to get back on track with this feature next year.  We did, however, complete a report on the trading patterns of biotech stocks, and see no reason not to release it now.  Take a look.

Dec 30:  Here's our January Effect report for 2005.

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The Dow was down .3%, Nasdaq up .1%.  Separation between groups was 2%.

Our "perceived risk" indicator was the best predictor of gains today...up 1.1%.  The next closest group was that of cheap stocks (up .9%), which was a full standard deviation point behind "perceived risk".  Stocks with recent losses, yearlong losses, or poor fundamentals (as measured by p/e ratios) were also strong.  No industry groups stood out.  Does this sort of behavior ring a bell?

Metals and mining stocks lost .8%.  Yearlong and monthlong gainers were also weak.

The above trends are positive for the next session.

Dec 29:  Both the Dow and Nasdaq lost about .2%.  Separation between groups was again quite small...1.6%.

Despite the low differential between the best and worst groups in our tables today, one rather significant trend did pop up...that of yearlong losers performing strongly (+1.1% today).  This 1.1% gain was a full .4% higher than the next-best performing group...a big number when you're looking at around 1500 different groups.  Looks like we're getting some early "January Effect" activity.

Three month losers performed well.  Semiconductors were relatively strong today.  Retails gained .6%.

On the weak side, we find banks (-.4%), yearlong and one-month gainers, and heavily shorted stocks.

The above trends are weakly positive for the next session.  Bear in mind that the second to last trading day of the year has a history of strong performance, so perhaps we'll get a little extra boost from that effect.

Dec 28:  We're back from vacation a bit early...

The Dow was up .7%, Nasdaq 1.1%.  Separation between groups was again a meager figure...1.8%.  Stocks are moving in tandem, with little "breakaway" action for traders to take advantage of.

Yesterday's big losers bounced back to the tune of 2.2% gains.  Yearlong and one-month winners were strong, reversing yesterday's trend toward gains in yearlong losers.  There certainly does seem to be an extra emphasis on stocks with big yearly gains or losses at this time of year, no?

On the weak side, dividend-paying stocks gained as little as .4%.  REIT's, non-volatiles, and large-caps were also weak.

The above trends are positive for the next session.

Dec 23:   Note:  We'll be taking a short Christmas vacation and won't be updating the site until Dec 30, or thereabouts.  We'll simply add 10 days to all subscriptions to make up for this absence of service. 

When we return, we'll be inundated with work...in addition to our usual daily summaries, we've got to generate yearly, quarterly, monthly, and half-monthly summaries of market performance, update all our investment tests, etc.  It'll be interesting to see which groups performed strongest and weakest in the last year...will oils top the list, or will some other non-industry group take the prize?

We'll also issue a brief "January Effect" report.  In it, we'll cite a few stocks that we think might partake in any January Effect, violating our usual focus on trend-spotting as opposed to individual stock-picking.

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The Dow was up .1%, Nasdaq .2%.  Separation between groups was 2%...again!

The strongest stocks were those with high "perceived risk" (low price and high volatility)...up 1.1%.  Stocks with large yearlong gains were up 1%, though those with large monthlong losses were also relatively strong.

Stocks with large dividends were weak...down as much as .9%.  Not surprisingly, then, REIT's weren't far behind, with losses of .7%.  Stocks with large gains over the last month were weak.

The above trends are positive for the next session, though we'd like to see more of a differential between the gains in our best and worst performing groups.  Then again, it's Christmas time, so we shouldn't expect any massive stirring of the market waters.

Dec 22:  The Dow was up .5%, Nasdaq .3%.  Separation between groups was 2.4%...the somewhat larger figure than we've seen of late is due a very selective drop in oils (down .9%)...the next closest group (out of around 1500 we look at) lost only .4%.

Yearlong losers were up 1.5%...that's rather significant when you consider that the next closest group (those trading well below their 20 day moving average) gained only 1.2%.  Despite the selectivity of this gain, we'd be hesitant to call an "early January effect" as yet....yearlong gainers have shown strength as well of late.  Semiconductors and retails were strong.

Outside of oils, losses were seen in utilities, large caps, and expensive stocks.

The above trends are positive for the next session.

Dec 21:  The Dow was up .9%, the Nasdaq 1.1%.  Despite these decent gains, separation between groups was still only 2%...stocks moved in tandem.

Volatile stocks were relatively strong...up as much as 2%.  Stocks with recent or one month losses were strong, though longer term winners also outperformed.  No industry groups really stood out.

On the weak side, biotechs gained a mere .2%.  Non-volatiles, and recent and one-month winners were weak as well.

The above trends are positive for the next session.

Dec 20:  The Dow gained .1%, Nasdaq lost .3%.  Separation between groups was again meek, at 2%.

Metals and mining were strongest today, gaining .3%.  Non-volatiles, expensive stocks, and utilities were also positive.

On the losing side, where the action was, semiconductors got burned...down 1.7%.  Volatile stocks in general were weak.  Cheap stocks were hurt.

The above trends are negative for the next session;  hopefully, the historic trend toward solid gains at this time of year will moderate that.

Dec 17:  Both the Dow and Nasdaq were down about .5%.  Our own non-weighted sampling of the Russell 3000 showed the general market as flat, reflecting a better market for small-caps.  Separation between groups was a mere 1.8%...perhaps some folks have already left for Christmas.

Yearlong gainers were up around .9%, while three month losers were also strong.  Monday's winners fared well.  Small caps and lightly shorted stocks also took part in the gains.  REIT's gained.

On the losing side, large caps and stocks held by large numbers of institutions were weak (down .6%).  Retails lost.

None of the above trends give any strong clues as to the direction of Monday's market, so we'll refrain from a prediction. 

Dec 16:  The Dow was up .1%, while the Nasdaq was down nearly .8%.  Separation between groups was 2.1% (again!).

Stocks with big yearlong losses were strong, up .7%.  This reverses yesterday's focus on gains in big yearlong winners, though yearlong winners still managed to outperform the market today.  The group of yearlong losers would be quite a bit stronger yet if semiconductors were excluded (they lost 1.4%, leading all losing groups).  Oddly, the most volatile 4% of stocks also fared well today, despite weakness in the Nasdaq.  A rather schizophrenic market.

Outside of semiconductors, banks were weak.  Stocks with nice gains on Monday lost in the area of 1.2%.

The above trends give mixed signals, so we'll refrain from speculating on the direction of tomorrow's market.

Dec 15:  The Dow and Nasdaq were both up about .1%.  Our own take on the market had it up .7%, showing a discrepancy between large and small cap performance.  Separation between groups came in at 2.1%.

Stocks with big yearlong gains led the pack with 1.9% gains, followed by oils (1.8%).  Volatile stocks were strong, even though tech stocks were not exceptional, and biotechs (-.2%) were weak.  Stocks with 3 month losses or nice recent gains were also included in our tables of winners.

Non-volatiles were weak.  Despite the gains in yearlong winners, expensive stocks failed to gain much ground.

The above trends are positive for the next session.

Dec 14:  We've got our data for the first 10 days of December.  Our own non-weighted sampling of the market had it up 1.2%.

The winning side of our tables was led by stocks with large losses over the last three months or so...up over 6%.  Stocks trading well below their most prominent resistance levels were strong.  Biotechs gained better than 5%.  After risk-adjustment, large-caps and expensive stocks were rather strong.

The losing side of our tables was dominated by oils...down better than 3%.  

Looking for matching periods, the first half of December 2000 was about the best we could come up with.  For what it's worth, the second half of December 2000 showed continued gains, though volatile stocks underperformed.  Large caps were weak.  Oils were spectacular over this time period, though we wouldn't expect a repeat...seasonal forces certainly take a backseat to political and macroeconomic forces when talking about oil pricing in the year 2004.

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We stumbled across an article suggesting that the "January effect" can be taken advantage of in December by purchasing small cap stocks.  We disagree strongly, and have added a refutation of this view on our December summary page (look for the white box near the bottom of the page).

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For the day, the Dow was up .4%, the Nasdaq .5%.  Separation between groups was a relatively low 2.1%.

Stocks with very high or negative PE ratios were strong today (+2%), followed closely by semiconductors...most likely, those semiconductors with poor financials were particularly strong.  Cheap stocks and volatiles were also strong.  Retails gained 1.6%.

On the losing side, REIT's lost .1% on the heels of an interest rate hike.  Expensive stocks, non-volatiles, and dividend-payers were weak.

The above trends are positive for the next session.

We'll have our half-month summary out before the next market session.

Dec 13:  Both the Dow and Nasdaq were up around 1%.  Separation between groups was 2.6%.

Stocks with large yearlong gains were up 2.1% today, followed closely by oils (2.0%).  Since there's a good deal of overlap between the two groups, one is left wondering what forces are "primary"...here it's interesting to note that oils gained nicely despite minimal increases in the actual price of oil today.  Stocks with large 3 month losses were also strong today.

On the losing side, we have last Tuesday's big winners...down .5%.  The loss was not particularly significant from the viewpoint of statistics, though.  Yearlong losers and retails were also weak.

The above trends are mildly positive for the next session.

Dec 10:  The Dow and Nasdaq both lost around 0.1%.  Our own read of the market had it up about .4%, though, showing a schism between small and large cap performance.  Separation between groups was 2.6%.

Stocks with big gains yesterday continued to gain today...the group was up 1.9%, outdistancing the next closest group by about .3% (pretty significant, as things go).  Momentum has been the name of the game this month.  Volatile stocks, small caps, and cheap stocks were also strong.

On the losing side, oils suffered to the tune of .7%.  Large caps were weak.

The above trends are positive for the next session.

Dec 9:  The Dow gained .55%, and Nasdaq .15%.  Separation between groups was 3%, with strongly focused losses in semiconductors again accounting for a good deal of that spread.

Large cap stocks gained as much as 1%.  Expensive stocks were strong as well.  3 month losers were relatively strong.  No industry group stood out...the market was more fixated on market capitalization today.

Besides semiconductors (down 1.6%), stocks with large 3 month gains, cheap stocks, and volatile stocks in general were weak.

Despite the gains in the general market, the losses in semiconductors and volatile stocks are not positive for tomorrow's session.

Dec 8:  Both the Dow and Nasdaq gained about .5%.  Separation between groups was 3.2%, thanks largely to losses of about 1.4% that were strongly focused on the semiconductor sector (due to a number of downgrades).

On the positive side, stocks with recent losses reversed, gaining as much as 1.8%.  Biotechs, healthcare, and retails were strong.  Small caps and heavily shorted stocks fared well.

Besides semiconductors, losses were seen in software stocks and large caps.

The losses in semiconductors muddle the prospects for tomorrow.  We note that the group has actually exhibited "negative" leadership of late...gains in the group have tended to portend losses in the general market...so perhaps these losses could be looked at in a positive light.  Over the longer term, though, losses in semiconductors have been a decent indicator of continuing losses in the general market.  

Dec 7:  The Dow lost 1% while the Nasdaq dropped 1.7%.  Despitely the relatively large losses, separation between groups stood at 2.1%...stocks moved pretty much in tandem.

Given the losses, it's not surprising that the stocks that best resisted the pull of the market were non-volatiles...down .8%.  Retails fared OK, losing only 1%...this reverses a recent trend toward market-leading losses in the group.

The real action was in the "big losers" column.  Here, stocks with weak "momentum" lost 2.9%, followed by oils (-2.8) and mining and steel (-2.7%).  Stocks with large yearlong gains in general were weak.  

Semiconductors, biotechs, and volatile stocks did not appear on the losing side of the tables...a minor positive for the next session, though we'd bet on another negative session tomorrow if a gun were put to our heads.

Dec 6:  The Dow (-.43%) and Nasdaq (+.15%) were uninspiring.  Separation between groups was a relatively mellow 2.1%.

Cheap stocks (+.8%), Friday's big gainers, and semiconductors were relatively strong.  Losers included Thursday's big losers, transports (-1.2%), retails, and banks.  In general, more of a momentum atmosphere than a bottom-fishing one.

The above trends are weakly positive for the next session.

Dec 3:  Continuing a recent trend, both the Dow (+.1%) and Nasdaq (+.2%) were unimpressive, but separation between groups was relatively large...3%.  So, despite the flatness in the general market, gains were to be had by buying/shorting the right groups.

Semiconductors fared well today...up 1.8%.  Several other groups reversed recent trends toward losses...oils and REIT's gained, and yearlong gainers were up.

On the losing side, banks lost 1.2%.  The market shunned small caps...the first and second deciles of our "marketcap" statistic were both found in the loss column (around -.8%).  Stocks with low institutional holdings, not surprisingly, were weak as well.

The above trends are slightly positive for the next session.

Dec 2:  The Dow was flat, while Nasdaq gained .25%.  Separation between groups was a relatively large 4.7%, with big losses in oils (-2.8%) paving the way.

Stocks with large yearlong losses were again strong, gaining 1.9%.  Volatile stocks, those with recent gains, cheap stocks, and biotechs were also strong.

Losing stocks included mining and steel, yesterday's losers (oils), and those with big yearlong gains.

The above trends are positive for the next session.

Dec 1:  The first trading day of December began with a bang:  the Dow was up 1.6%, Nasdaq 2.0%, and separation between groups was nearly 6%, with falling oil prices catalyzing the action.

Semiconductors gained 4.3%.  Cheap stocks, yearlong losers, yesterday's losers, and volatile stocks in general were strong.

On the losing side, oils dominated, with losses around 1.6%.  Yearlong gainers, naturally, were weak.  Non-volatiles gained less than 1%.  Utilities were weak.

The above trends are positive for the next session.

Nov 30:  We've got our data for the full month of November.  Our own sampling of the general market had it up about 7.5%.

A number of November historical trends played out nicely...stocks with big 3 month, 1 month, and yearlong losses all reversed nicely (up 14+%).  Volatile stocks in general fared well.  Despite these trends, however, semiconductors and biotechs didn't lead the pack...in fact, they were rather weak after risk-adjustment.

No single group lost money.  Non-volatiles were weak...up less than 4%.  Stocks with large 1 month to 3 month gains didn't impress either...up around 5%.

Eyeballing our historical November data, November of 2002 seems to match up fairly well with Nov. 2004.  For what it's worth, December of 2002 was weak, with many of November's biggest gainers reversing and losing 20% or more!  Historically, of course, there has also been a reasonably strong trend toward reversals in November's strongest groups...beware!

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The general market was up about 1.2% in the second half of November.

Oils were quite strong, gaining nearly 9%...this reverses a very weak performance in the first half of the month.  Stocks with big 3 month or yearlong losses gained around 6%.  As we've seen on myriad occasions, stocks with a large high-close differential on the last day of the previous month gained nicely...up 5.5% this time around.

On the weak side, retails in general lost around 2%.  REIT's, as usual, were weak in November, losing about 1%.

Looking for matches, Nov H2 1996 compares well.  December of 1996 was weakly negative, but decent gains were available in REIT's and cheap stocks.  Big November gainers were to be avoided.

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Both the Dow and Nasdaq lost about .5%.  Separation between groups was about 2.5%.

On the last trading day of the month, nothing emerged of great significance on the positive side of our tables...stocks with a history of performing well at the end of November did so again.  Healthcares, REIT's, and stocks that have fared well over the last year were positive.

On the negative side, where the action was, retails were hurt to the tune of 1.8%.  Here we go again...pity the fools who invest in this group at this time of year.  Semiconductors, yesterday's losers, and yearlong losers all lost better than 1%.

The above trends are negative for the next session.

We'll be breaking down the action in November before the next session opens.

Nov 29:  The Dow lost .4%, Nasdaq gained .2%.  Separation between groups improved...about 2.5%.

Strong groups included last Friday's losers (up 1.7%), yearlong losers (1.6%), cheap stocks, small caps, and volatile stocks in general.  

Losers included large caps (down .7%)...not surprising given the losses in the Dow.  Non-volatiles also lost.  Utilities were weak.

The above trends are positive for the next market session.

Nov 26:  The Dow and Nasdaq were both flat.  Separation between groups was also unimpressive...about 2%.

Despite the lack of distance between best and worst groups, stocks with big yearlong gains showed a significant tendency to continue their momentum...up 1.6%.  Metals, which have gained quite nicely over the year, lagged yearlong gainers...up 1.4%.  Momentum plays of nearly every variety proved fruitful in the post-Thanksgiving trading session.

REIT's lost about .3%.  Semiconductors were weak as well. 

The above trends are slightly negative for the next session.

Nov 24:  The Dow was up .25%, Nasdaq .9%.  Separation between groups was a meager 1.9%, with no trends showing special significance...a market without focus.

Stocks with recent or yearlong losses and volatile stocks in general outperformed.  On the weak side, non-volatiles, heavily shorted stocks, banks, those with low institutional holdings, and those of low marketcap were weak.  Despite the gains in recent losers, monthlong losers were weak.

The above trends (specifically, the gains in volatile stocks) bode well for the next session.

Nov 23:  Both the Dow and Nasdaq finished flat.  Separation between groups was 2%.

Oils led the way today, up 1.2%.  Not surprisingly, then, yearlong gainers and yesterday's gainers (oils) were also strong.  Three month gainers also outperformed.

Tech stocks were down .8%.  Yearlong losers were again weak.

The above trends are slightly negative for the next session.

Nov 22:  The Dow was up .3%, Nasdaq .7%.  Separation between groups was a moderate 2.2%.

Nothing of great significance emerged on the positive side...small caps, oils, and 3 month and yearlong winners were strong.  On the weak side, stocks with large 1 month losses lagged (up .1%), followed by biotechs, and yearlong losers.  Despite the gains in Nasdaq, tech stocks weren't impressive.

The above trends are neutral for the next session.

Nov 19:  The Dow was down 1.1%, Nasdaq down 1.6%.  Separation between groups was a relatively high 3.8%, driven by gains in oils (up .9%) and losses in semiconductors (down 2.9%) at the extremes.

Oils, in fact, were the only positive group out of around 1500 that we look at.  Groups that resisted losses included metals and mining, small caps, and those with big losses on Monday.

Other losers include stocks with nice recent or one-month gains (e.g. semiconductors), volatiles, and Monday's winners.

The above trends are negative for the next session.

Nov 18:  Both the Dow and Nasdaq were up .2%.  Separation between our best and worst groups was minimal...about 1.7%.

Gains of .9% were available by purchasing big yearlong losers.  This strategy has shown up in our tables fairly frequently of late.  Cheap stocks, a group that has been surprisingly quiet this year, gained .9% as well.  Oils, recent losers, and semiconductors also outperformed the market.

On the negative side we find nothing that sticks out above the background noise of the market.  Retails (-.7%) and biotechs were weak.  Stocks with high insider holdings underperformed.

The above trends offer few clues as to the direction of tomorrow's market.  Given the gains in semiconductors, we'd guess "up".

Nov 17:  The Dow gained .6%, Nasdaq 1%.  Separation between best and worst groups was strong...about 4.5%.

Semiconductors were up almost 3%.  Cheap stocks gained 2.5%.  Volatile stocks in general were strong.  REIT's were burned to the tune of 1.5%.  Banks, dividend-paying stocks, and non-volatiles in general lost money as well...further evidence that money is moving out of non-volatiles, at least in the short term.

The above trends are positive for the next session.

Nov 16:  The Dow lost .6% and Nasdaq .75%.  Stocks moved in tandem...there was very little separation (about 1.6%) between our best and worst groups.

Stocks with large 3 month losses showed a tendency to resist further losses...this group was essentially flat.  A number of retails were hit with losses around 1.3%.  Stocks with good gains over the last few days to one month tended to lose in excess of the market.

The above trends are slightly negative for the next session.

Nov 15:  The Dow was up .1%, the Nas .4%, but there were nice gains and losses to be had in specific groups.

Semiconductors gained 2.6%.  Not surprisingly, then, big yearlong losers had a nice day as well.  On the other hand, oils lost 2%.  Non-volatiles in general lost .3%...an interesting sign, leading one to wonder if money isn't being redistributed into more volatile stocks.

The above trends are positive for the next session.

Nov 12:  We've got our data for the first half of the month.  Our unweighted sampling of the market has average gains a bit above 6%.

Stocks that came into the month with short term averages well below longer term averages gained nearly 10%.  But one month and three month losers fared well in general...up around 9%.  Stocks with volume gains in the latter part of October did nicely.  A number of generally overlooked industry groups were strong...transports, healthcare in particular.  On a risk-adjusted basis, utilities were quite strong.  Non-volatiles in general were strong after risk-adjustment...this behavior was also seen in the same period last year.

Oils were weak.  Even then, with the general positive atmosphere of the period, they gained around 3%.  Semiconductors were weak...up 4%.  Normally, one would expect semiconductors to outperform the market in such an environment.  Naturally, non-volatiles underperformed the average stock...but after risk-adjustment, they did quite well.  Stocks with low institutional ownership were weak...giving some clue as to where the fuel for this rally is coming from.  Cheap stocks underperformed after risk-adjustment.

Looking for parallels, Nov h1 1995 offers a decent match.  Unfortunately, Nov h2 1995 was a murky (though positive) period in the market, without any strongly focused trends.  It's noteworthy, however, that longterm losers tended to continue their poor performances, reversing their more recent gains.  2001 also offers a weak match...here, cheap stocks, and 3 month and yearlong losers prospered.

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The Dow was up .7%, Nasdaq 1.2%.  Again, stocks moved in tandem, with a 2.1% difference between our best and worst groups.

REIT's were strong, up 2%.  Stocks that have taken a yearlong beating were up again (1.7%), though it's interesting to see that semiconductors (where numerous big yearlong losers reside) did not find themselves on our list of best performing groups.  Oils and retails were strong.

Biotechs were weak...down just a tad.  Heavily shorted stocks had minimal gains.

The above trends are slightly positive for the next session.

Nov 11:  The Dow was up .8%, the Nasdaq 1.31%.  Despite the gains, separation between our best and worst groups was a relatively sedate 2.1%.

Stocks with big yearlong losses just edged out semiconductors on our list of best gaining groups (both up about 2%).  Naturally, there's a lot of overlap between these two groups.  Cheap stocks in general and yesterday's losers were also strong.

Nothing significant occured on the negative side of our tables.  Yesterday's big gainers dropped .1%.  Oils were weak.

The above trends are slightly positive for the next session.

Nov 10:  Continued flatness in the big indices (Dow +0.0, Nasdaq -.43%), with decent profits to be made by being in the right groups.

Yesterday's big winners continued to gain (around 1.7%), though recent losers also fared decently.  Oils gained 1.2%.

Semiconductors continued their recent slippage, down 1.5%.  Not surprisingly, then, stocks with large yearlong losses (e.g. semiconductors) lost ground.

The above trends are negative for the next session, though (and please pardon the cliche...) it seems to be a "trader's market"...you may not gain or lose much by following a broad index, but there certainly are profits and losses to be had by playing the right groups.

Nov 9:  Again, the Dow (-.05%) and Nasdaq (+.20%) were relatively flat.  And again, our own non-weighted look at the market painted a slightly different picture, with the general market up .45%.

Biotechs were our strongest group, up 1.8%.  Volatile stocks in general gained as much as 1.6% today.  Recent and one-month losers were strong.  

Despite general gains in volatiles, semiconductors were actually down around .3%.  Large caps were weak, as well as the smallest of small caps.  Stocks with heavy insider ownership were weak.

The above trends are positive for the next session.

Nov 8:  The Dow, Nasdaq, and Russell 3000 were all flat, but a somewhat negative investment environment is revealed when you look at non-weighted indices.  Our own take on the market had it down about .35%.

On the positive side were non-volatiles, stocks with nice recent momentum (+.3%), and those with large 3 month gains.  On the losing side, oils predominated (-2.2%).  Friday's gainers were weak.  Outside of the losses in oils, none of these trends are particularly significant.

The above trends are slightly negative for the next session. 

Nov 5:  Both the Dow and Nasdaq were up around .75%.

We saw some rebounds in victimized groups...yearlong losers and semiconductors were up around 1.6%.

The real action, though, was on the losing side, where 2.5% losses in REIT's (on fears of higher interest rates) outdistanced the next-losingest group by 1.6%.  Non-volatiles in general were weak.

The above trends are positive for the next session.

Nov 4:  Despite nice gains in the Dow and Nasdaq (1.75% and .95%), the separation between our best and worst groups was only about 2.4%.  Stocks moved in tandem, with no single group showing amazingly significant gains.

Stocks trading well above their most prominent resistance levels gained 2.4%.  A number of transportation-related industries gained nicely...up 2.2%.  Entertainment, hotel, and a number of retail stocks gained similarly.

On the weak side were semiconductors, stocks with large yearlong and monthlong losses, cheap stocks, and volatile stocks in general.

Again, the above trends are neutral to slightly negative for tomorrow's market session.

Nov 3:  History shows that the stock market outperforms during Democratic administrations.  History also shows that the stock market believes the opposite.  Thus the Dow and Nasdaq gained around 1% and the market focused on the industries that would most benefit from another 4 years of a Bush presidency.

Oils gained nicely (+2.7%), given the possibilities for further disruptions in the Middle East.  Drug stocks were relatively strong.  

On the losing side, semiconductors were weak.  Stocks with large recent or 1 month gains were weak, gaining as little as .3%.

The above trends are neutral to slightly negative (given the losses in semiconductors) for the next market session.

Nov 2:  The Dow was down .2%, while the Nasdaq was up by about the same.  The separation between our best and worst groups increased to about 2.4%, meaning things livened up a bit today.

Nothing of great interest emerged on the positive side.  Stocks with yearlong losses continued to perform well, up around .7%.  Heavily shorted stocks were strong.

On the losing side, oils lost about 1.6%.  Biotechs, REIT's, and companies with large dividends were also weak.

The above trends are neutral for tomorrow's session.  Should be interesting, though, given the fact that the market will have overnight to digest the election results.

Nov 1:  Another day of very sedate trading, with both the Nasdaq and Dow up marginally and the separation between our best and worst groups under 2%.

As is often the case on the first day of a month, the best stocks were those that lost significantly on the last day of last month (up 1.2%).  Cheap stocks, moderately volatile ones, and heavily shorted ones were up nicely.

On the losing side were biotechs (-.8%), oils, stocks that gained nicely last Friday, large caps, those with high insider holdings, and those with nice yearlong gains.

The above trends are slightly positive for the next session, but the market does seem preoccupied with other things (the election).

Oct 29...We've got our data for the full month of October.  We have the most general market rising about 2%.

The single best group of stocks for the month...those that have performed very strongly over the longest October period for which we have data.  These stocks gained about 9%.  Not far behind were those with strong 3 year histories.  Semiconductors gained nearly the same.  Stocks with poor yearlong performances were strong.  

Volatile stocks gained around 5%, but it's worth noting that non-volatile stocks in general fared well after risk adjustment, particularly those that had come into the month with strong yearlong performances.  Banks were strong after risk-adjustment.

On the losing side, we find oils (-2%), stocks with high institutional ownership (!), stocks with big yearlong gains, biotechs, and those that were weak in October of last year.

October of 2001 seems to offer a decent match to October 2004.  For what it's worth, November of 2001 saw continued gains in yearlong losers, losses in 3 month winners, and nice gains in semiconductors.

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The second half of the month saw 3% gains in the general market.  The full month trends mentioned above predominated...winners included stocks with big yearlong losses, semiconductors, and volatile stocks, though a couple of our proprietary indicators actually outperformed these a tad (with gains around 7% for the period).

Stocks with big yearlong gains were flat.

The behavior above is rather typical for this time period...several historical periods match up well...late October 2002, 2001, 1998, 1993.  The first half of November in each of these years was positive, with nice gains available in volatile stocks.

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A very sedate trading session.  Nasdaq was flat and the Dow gained .2%.  Our own breakdown of the market had less than a 2% spread between the best and worst performing groups...a market lacking focus.  Or, perhaps, a "preoccupied" market.

Oils gained about .8%.  Large caps, stocks with recent and 1 month losses were relatively strong.

Small caps were weak.  Stocks with nice 1 month gains lost around .6%.

The above trends say little about the next trading session.  With the election and weekend looming, one would expect that Friday's session would have little effect on Monday's action anyway.

We'll have a breakdown of the month's winners and losers shortly...

Oct 28...The Nasdaq was up .3%, while the Dow was flat.  Nevertheless, some nice gains and losses were available in the right places.

Stocks with big yearlong losses topped our list of gainers...up 2.4%.  One might suspect that these gains were simply the by-product of selective purchases in the semiconductor group...but this group was nowhere to be found in our tables of today's top-gaining groups!  Cheap stocks and volatile stocks also gained nicely.

On the losing side, oils were weak...down 2.2%.  Stocks with big yearlong gains (e.g. oils) lost 1.8%.

It would be worthwhile to pay close attention to the recent trend toward bottom-fishing...it's the sort of behavior that tends to persist once it gets rolling, and some groups of stocks (e.g. semiconductors) have a long way to go to recover their yearlong losses.  It also very typical for October and November.

The above trends are positive for the next session.

Oct 27...The Dow was up 1.15% and Nasdaq 2.14%.

Semiconductors fared nicely...up 3.3%.  Stocks with weak yearlong performances, volatiles, and biotechs were also strong.

On the losing side, oils lost better than 1.3%.  Stocks with strong yearlong performances were weak in general.

The above trends bode well for the next session.

Oct 26...The Dow was up 1.4% and the Nasdaq .8%.

Insurance stocks were strong today, up 2.6%.  Given the outperformance of the Dow today, it shouldn't be surprising that fundamentally strong stocks gained nicely.  Yesterday's emphasis on cheap stocks reversed.

Semiconductors lost .8% today.  Volatile stocks in general were weak.  Cheap stocks were flat.

The above trends send mixed signals, so we'll refrain from speculating on the direction of tomorrow's market.

Oct 25...The Nasdaq and Dow both lost marginally...around .1%...but our own unweighted sampling of the market had it up about .4%.  That's because cheap stocks and small caps fared well.  These groups have not appeared in our tables with their usual frequency this year, leading us to wonder if the market might be ready to refocus on them.

Volatile stocks in general performed nicely, up as much as 1.5%.  Transportation-related stocks gained.  Stocks with big losses over the last year continued their October rebound.

On the losing side were biotechs, large-caps, and those stocks with short-term averages dipping well below longer-term averages.

The above trends are positive for the next session.

Oct 22...The Nasdaq lost 2% and the Dow dropped 1%.

A number of recent trends reversed.  On the losing side, where the action was, semiconductors got burned (-3.3%), followed by yesterday's big winners, volatile stocks, and those with large recent gains.

Stocks that resisted losses well included medical technology and healthcare stocks (-.2%), non-volatiles, expensive stocks, and banks.

The above trends are negative for the next session.

Oct 21...The Nasdaq was up 1.1%, while the dowdier Dow was actually down .2%.

Semiconductors gained quite nicely...up 4.3% for the day.  Volatile stocks in general were strong.  On the losing side, biotechs continued their recent weakness, losing  .4%.  Non-volatile stocks were weak yet again, though they didn't actually lose value, as was the case yesterday.

The above trends are positive for tomorrow's session, though we'd be wary of investing in biotechs at the moment.

Oct 20...Here's the verdict for the first half of October:  the market was down about 1%, looking at our non-weighted selection of about 2000 stocks.

Software stocks were the best performing group by a fair margin.  They gained 3%, with the next best group, REIT's, gaining 2%.  REIT's were strongest on a risk-adjusted basis, however.  Other strong groups were yearlong losers, and stocks with strong historical performances in this half of October.

Losers were topped by biotechs, losing 4.5%.  Metals and mining were weak.  Stocks with large 3 month or yearlong gains lost 3.5%.

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The market was up moderately today.  Oils were clearly the group to be in, gaining 2.6%.  Metals and mining were strong.  Yesterday's big losers rebounded.

On the losing side, broadcasting and entertainment stocks lost around .5%.  Non-volatiles lost fractional percentages...we take this to be a positive sign for the next session, showing that money was actually moving out of this group into more volatile stocks.

We'll have a belated breakdown for the first half of October shortly...

Oct 4...Note:  Your webmaster will be vacationing until the 20th of October.  To make up for this absence, all subscriptions will simply be extended by two weeks.   

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The Dow was up a mere .2%, and the Nasdaq .5%, but some nice gains were available via bottom-fishing...choosing the 4% of stocks with the biggest yearlong losses would have netted you 3.5% for the day.  Three month losers also fared well.

Other gainers included volatile stocks in general, and cheaply priced stocks.

Nothing of significance emerged on the losing side.  Oils were weak...down .25%.

The above trends are clearly bullish for the next session.

Oct 1...As is often the case (check our historical daily data), the first day of the fourth quarter began with a bang.  The Dow was up 1.1% and Nasdaq 2.4%, but much bigger gains were available in the right places.

Semiconductors led the pack, up 5%.  Stocks with big-losses over the last three months and volatile stocks in general were also strong.

On the weak side, non-volatiles gained only .8%.  Stocks with big gains yesterday were relatively weak

The above trends are obviously bullish for next Monday.

Sep 30...We've got our third quarter data...the general market was down about 3.5%.

The top gainers were dominated by the sorts of stocks that are rather inflation-resistant, and relatively conservative as well.  Oils gained around 10%, and metals and mining weren't far behind.  The gains in oils occured entirely in the month of September, however.  REIT's gained 7%, bouncing back from a lousy 2nd quarter.  Banks and dividend-paying stocks in general also gained better than 3%.

On the losing side, semiconductors were picked on with a good deal of selectivity, losing better than 20%.  The second-worst group, cheap stocks, lost 15%.  Volatile stocks in general were weak.  Stocks that prospered in the third quarter of 2003 tended to lose in q3 2004.

Looking for historical matches, Q3 2002 seems a good one...weakness in semiconductors, relative strength in oils, REIT's, banks, etc.  Q4 2002, for what it's worth, was a wonderful period for bottom fishing...gains nearing 60% were available by loading up on stocks with large losses over the course of the last 12 months. 

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Looking at the month of September, the average holder of stocks walked away with about a 3.9% gain.

Strong groups included oils (up 11.3%), volatile stocks in general (8.5%), 3 month losers, 1 year gainers, and metals and mining.

Weak groups included retails (flat), non-volatiles, and REIT's.  The weakness in REIT's is in opposition to the broader trend for REIT's to gain in this year's third quarter.

It's a bit of a stretch, but Sep 1996 matches up decently with Sep 04.  Coincidentally or not, both Septembers fall in election years with an incumbent seeking a second term.  October of 1996 lost about .5%, with gains available in oils and non-volatiles, and losses in volatiles, biotechs, and yearlong losers.

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The second half of September was essentially flat.  As with the full month, oils (+5.6%), metals and mining (4%), and yearlong gainers were strong.  A number of retail groups were weak, losing as much as 3.5%.  Stocks with poor histories in the second half of September were again weak.

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The last trading day of the third quarter was surprisingly sedate...the Dow lost .55%, the Nasdaq gained .15%, and the separation between our best and worst groups was only 2.2%.

Stocks with a large high-close differential (at the end of the previous session) fared well, and those with a small differential were weak.  Fundamentally unsound stocks (as measured by profit margin) seemed to outperform.  Semiconductors outperformed.

Stocks with large 3 month or 1 year losses were weak.  This could be an omen that the group will reverse in the fourth quarter.  Selected retails and biotech were weak.

We've got a lot of number crunching to do, as it's the end of the quarter...we'll be letting you know exactly what happened in the last three months, one month, and half month in the next couple of days.

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