George Brooks: Good Time to Gauge the Intensity of Today's Strong Market Open

George Brooks |

Brooksie’s Daily Stock Market blog: An edge before the market opens.

Wednesday, April 6, 2011 9:24 am EDT

DJIA: 12,393.90
S&P 500:1332.63
Nasdaq Comp.: 2791.19
Russell 2000: 853.31

If institutions sell into today’s rally, it would be a warning that the advance in the market is due for a rest. Speculative fever is nevertheless mounting, and this kind of momentum is going to be tough to shut off.

Wall Street doesn’t appear to be worrying about a government shutdown, though opinion is divided on Fed policy, whether it will withdraw from a policy of stimulating the economy during the second half of the year, and eventually have to take measures to counter inflationary pressures.

Compromise has almost always been the way big decisions are made in Washington, this time should not be an exception. No one ends up totally happy, no one gets everything their way. The market is telling us today, there won’t be a shutdown.

Q1 earnings appear to be the driver of this market. Obviously, anything short of the Street’s projections would result is a nasty correction. Looking a few weeks ahead, this may be a good month to lock-in some profits, ahead of the end of the market’s “Best Six Months,” a recurring pattern detailed articulately in the Stock Trader’s Almanac.

According to the Almanac, since 1050, an investment on November 1 with a sale on April 30 produced results for the DJIA 12 times better than a corresponding investment between May 1 and October 31. Results for the S&P 500 were significantly greater where an investment in the S&P during the best six months was 72 times better than during the worst six months.

Not all years are comparable, distortions occur, nevertheless, the pattern is consistent enough to have serious merit.

The Best Six Months appears to have started earlier last year with liftoff in early September, two months ahead of schedule. This could increase the odds that this year’s “Worst Six Months” will occur on schedule, especially if accompanied by a drift (or perceived drift) to a more restrictive Fed policy.

Just a forward thought: The summer months could be bumpy but investors rewarded by the beginning of yet another Best Six Months in the fall.

George Brooks

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
STRP.W Straight Path Communications Inc n/a n/a n/a 0


Emerging Growth

Taranis Resources Inc.

Taranis Resources Inc is an exploration stage company. The Company along with its subsidiaries is engaged in the acquisition and exploration of mineral properties. Its projects include Thor Property in…

Private Markets

XY Find It

Founded by serial entrepreneur Arie Trouw, XY Findables follows a single guiding principle: customers should never lose anything important again. With over 50,000 users around the world, more than 100,000…


Uber connects riders with safe, reliable, convenient transportation providers at a variety of price-points in cities around the world. Uber makes money from charging their drivers 20% of the fare…