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Stock Market January Bounce |
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* Some traders predict a seasonal bounce when institutions
resume buying in January, after cleaning up their portfolios in
the last quarter.
* Some traders are optimistic that stocks would get a seasonal
December bounce as the "tax-loss" selling period for
institutional investors is in place. Institutional fund managers
typically close their books toward the year's end. So, in order
to offset the profits with the losses in their clients'
portfolios, they sell their high-cost poor-performing stocks in
November and buy back some of these stocks toward the end of
December and in January, after a stipulated 30-day waiting
period. |
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That strategy tends to create what some analysts call
the "January effect," in which institutional buying at the
beginning of the year drives up stocks.
* Another first month market predictive tool is the so-called
January Barometer, which looks at the entire month's market
performance. Basically, the theory goes, if the market is up in
January, it will be an up year. If the market falls in January,
look out below. Amazing accuracy or coincidence? * The January
Barometer has had an even better record than the first five-day
method. Since 1950, there have been only four significant
errors. This does not include six years when the |
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market was
essentially flat, in a range between down 5 percent and up 5
percent for the year. =======================================
http://www.australiansharetrading.com/ the complete online
resouse for share trading Please use this aricle, you have my
prior consent to do so, just don't change a thing.australian share
trading By Nik Halik =>
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