Calendar Effect

Market watchers are always looking for signs as to which direction the stock market is headed, and some signs are more scientific than others. Those who look for a calendar effect might attribute a slow trading day at the beginning of the week to the Monday Effect, while above-average price changes might occur in early January, known as (wait for it) the January Effect.

They closely watch for particular days of the week or month or even a particular time of day for increased or decreased activity or unusual price changes.

There's the October Effect after the two major stock market crashes that happened that month in 1929 and 1987, which still makes traders skittish. Many say they believe in the Super Bowl Effect that the results (NFL or AFL) can predict what direction the market will go that year.

Of course, prices can be subject to seasonal demand such as heating oil commodities selling for higher prices in the winter when demand is way up, but this is usually accounted for when buying futures. None of these calendar effect theories has ever been statistically proven and tend to be more of a coincidence, but be careful who you root for in the next Super Bowl…