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Sunday, May 04, 2008

Sy Harding May Not Go Away Just Yet

Sy Harding, editor of a newsletter called "Sy Harding's Street Smart Report", uses a technical indicator called MACD (Moving Average Convergence Divergence) in an attempt to improve on the "Seasons in the Sun" timing system often called "Sell in May and Go Away."

Seasonal timing has followers out of the market on May 1 (May Day) with a return to fully invested date of October 31, Halloween.

Since Mid 2002 through April 29, 2008, Mark Hulbert calculates the following annualized returns:

  • Halloween Indicator = 4.5%

  • Sy Hardings MACD = 8.7%

  • Buy-and-hold Wilshire 5000 = 7.5%

Mark Hulbert wrote of Sy's success:

  • "The Hulbert Financial Digest has been tracking, since May 31, 2002, Harding's record in deviating from the strict version of the Halloween Indicator, and on average he has done markedly better."

  • "To put Harding's success into context, consider that since mid-2002, a buy-and-hold in the stock market has produced a 7.5% annualized return (through April 29). A purely mechanical application of the Halloween Indicator (automatically entering the market on Halloween and exiting on May Day) would have produced a 4.5% annualized return."
  • "Harding's modification of the Halloween Indicator: It produced an 8.7% return (annualized) over the same period, or 4.2 percentage points per year better than a purely mechanical application of this seasonal pattern -- and 1.2 annualized percentage points better than buying and holding. "

Harding now says "the exit [from the market pursuant to the Halloween Indicator] could be delayed to as late as May or June if the market's rally off its early March low continues."

Kirk Lindstrom's Investment Letter Performance

Followers (New)