Jonathan Krinsky, Miller Tabak’s chief technical market analyst, recently took a look at trading activity right before Turkey Day. And if you’re the kind of person who believes in swing trade stock picks seasonality — “sell in May” or the January Effect or a Santa Claus rally — then take note. Because today is your last chance to buy into a three-week market-timing trade that has made money for nine years running.
The gist: Buy the market the Friday before Thanksgiving (that’d be TODAY) and sell two weeks after Thanksgiving (that’d be Dec. 7). There’s no swing-trade stock picks, specifically, but the direction of the market alone is enough to turn a quick profit.
Take a look at the performance that came with this quick trade:
- 2011: 3.3% gain
- 2010: 3.4% gain
- 2009: 1.9% gain
- 2008: 10.0% gain
- 2007: 3.1% gain
- 2006: 0.6% gain
- 2005: 0.9% gain
- 2004: 1.5% gain
- 2003: 1.1% gain
Obviously, if you believe any trade is a “sure thing” on Wall Street, you deserve to have your head examined. But it’s particularly noteworthy that even in down years — and especially in the volatile market after the financial crisis — that this trade has paid off.
The gutsy trader may stick his neck out with a leveraged ETF — perhaps the ProShares Ultra S&P 500 ETF (NYSE:SSO) that aims to deliver double the returns of the benchmark index. Or if you want really spicy exposure, go triple with the Direxion Daily Small Cap Bull 3X ETF (NYSE:TNA).
And heck, if the market continues to suffer … why not wait until Monday morning and see if you can get in at an even lower price point?
Just keep in mind that volatility can swing both ways with these leveraged funds — and, of course, that past performance is no guarantee of future returns.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP.