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Buy Yom Kippur, Sell Passover

Happy Jewish New Year 5782! May it be a sweet year for you
all! As we informed you early this month the market tends to exhibit weakness
during the Jewish High Holy days
from Rosh Hashanah to Yom Kippur. Perhaps it
is the market’s annual repentance for its own sins that drives the market lower
over the years during the ten days of repentance or the days of awe as they are
often referred. This trade ends tomorrow on Yom Kippur, September 16, but as of
today’s close DJIA is down about 0.8% from the close on Rosh Hashanah.

We attribute this perennial pullback to the fact that market
liquidity drops as many market participants step away from the market and
likely square positions ahead of these ten days. These days of awe also land
during the seasonally weak end of Q3/beginning of Q4 period as fund managers restructure
portfolios and prepare for the October 31 mutual fund deadline. This has made September
the worst month of the year
and contributed to the phenomenon of
Octoberphobia.

But there is a flipside to this trade. Buy Yom Kippur, Sell
Passover. This has an even greater accuracy ratio than Sell Rosh Hashanah, Buy
Yom Kippur up 72% of the time with average gains of 7%. And as I am sure our
followers will realize this trade get a big boost from seasonal market strength
during Q4 and Q1 and of course the Best Six Months of the Year November-April.

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