Sector Performance Following Thanksgiving Day

This time last year I posted a Thanksgiving day blog article which suggested that buying the market on the Friday which followed Thanksgiving day, and selling the market 20 trading days later, was a potentially good trade idea.

So, was this true last year?

Not really!



Although the market did rally during this period (as it had done on 25 of the past 30 years), the 0.67% return was much lower than the 1.85% average return produced during earlier years.

This year I thought it would be more interesting to study the performance of individual equity market sectors after Thanksgiving day.

Rather than testing the 20 day performance, I want to know the average historical performance of the major equity market sectors if buying the open of the Friday which follows Thanksgiving day and then selling at the close of the first trading day of the next year.

The sectors which I will be testing are as follows:

  • Consumer Discretionary
  • Consumer Staples
  • Energy
  • Financial
  • HealthCare
  • Industrial
  • Materials
  • Technology
  • Telecommunications
  • Utilities

The sample period is between the year 2000 and 2014. This provides us with 15 sample years per sector.

Do some sectors perform much better or worse than others?

Results (please click image for better view) :



The strongest to weakest sectors between Thanksgiving day Friday and the start of the new year are as follows:

  1. Materials
  2. Financial
  3. Energy
  4. Industrial
  5. Telecommunications
  6. Consumer Discretionary
  7. Healthcare
  8. Utilities
  9. Consumer Staples
  10. Technology

*Note: If we discount the bursting of the tech bubble in 2000, the average % P/L per trade of the technology sector remains low at 2.26%. This still leaves technology in a place of being the 9th strongest sector during the sample period.


When compared to the average % P/L per trade of the S&P500 during the same period (+2.67%), it appears as though we might be able to outperform the market if only focusing on a select number of sectors between Thanksgiving day Friday and the new year.

To put this idea to the test, I will create a hypothetical portfolio which consists of 7 equally weighted stocks (one selected from the 7 strongest sectors).

This means that we will have exposure to all sectors except for Utilities, Consumer Staples and Technology.

To select the stocks, I will use the Volume Profile and Relative strength Indicator combination which I refer to in my weekly market snapshots.

If using this exact approach last year, the portfolio would have performed as follows…

26-11-2015 13-46-58

The components of last years portfolio can be found below…

26-11-2015 13-45-00

This year’s portfolio will consist of the following stocks (each to be bought at the open of 27/11/15)…

  • DOW (Materials)
  • CINF (Financial)
  • FANG (Energy)
  • LUV (Industrial)
  • VG (Telecommunications)
  • BYD (Consumer Discretionary)
  • DYAX (Healthcare)

I’ll update this page during the weekend and monitor the performance of the portfolio over the coming weeks.

I’m curious to discover whether or not the portfolio outperforms the market as it did during the same period last year.

Disclosure: I currently have no positions in the aforementioned stocks and have no intention of doing so. The above portfolio is purely experimental.


*On a separate and totally unrelated note, I’ve grown to enjoy watching the NFL during the past few years…and never more so than on Thanksgiving day.

This year I’m going to have even more fun watching the games because I’ve put a little wager on!

My picks are as follows:

Lions +1.5

Panthers to win

Packers -6.5

Let’s see how much this silly Brit really knows about Football! *Update 27/11/15: 2 out of 3 ain’t bad.

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