Calendar Effect

A term for a number of theories that specific dates and periods have a certain (bullish or bearish ) influence on the stock market. These include the Monday Effect, October Effect, January Effect and so on.

Many of these lack statistical evidence but have some participants who believe in them. The fact that many major stock market corrections or crashes occured in October makes some investors feel queasy and uncertain when October approaches.(One StockTradingToGo writer believes that October is usually weak because bonds start falling after Tax Day April 15th and only bottom at around October after the money locked up in coffers goes back into circulation. This has statistical evidence, see Van Tharp “Trade your way to financial freedom” for more)

The January Effect used to occur due to tax reasons, though it has been diminished nowadays, perhaps because people are more aware of it.

Statistically, market indexes have shown strong gains after holidays.

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