Powered By the Market Information Machine (www.lim.com¹)

© Copyright 2008-2012, MarketHistory.com
Unauthorized mirroring, photocopying, facsimile or any other
distribution of this copyrighted material is prohibited.
All rights reserved.

Papal Visits to the U.S. - Heaven and Hell (CORRECT)    

 SPX

Wednesday, April 16, 2008

By Gibbons Burke

Editor's Note: The 1982 occurrence mentioned in the first version of this story was incorrect. I added a 1979 visit which had been omitted the first time and included the Alaskan stopovers as well. The 10-day peak edge is still bullish but less strongly. The peak edge is now two days after the start of the trip.

Pope Benedict XVi landed at Andrews Air Force base on Tuesday, commencing his first visit to the United States since he was elevated to pontiff of the Catholic Church, and the first papal visit of the third millennium.

The first visit by a pope to the U.S. was a one-day visit to New York by Pope Paul VI in 1965. Pope John Paul II, if eventually beatified, will likely be known as the patron saint of frequent fliers² - he made seven visits to this country (including two brief stopovers in Alaska during trips to the Far East.)

Q: How have previous papal visits affected the stock market?

A: Six Seven previous occurrences is not really a sample to hang your hat on, but it's clear that there are two sorts of results - either the market goes up nicely, or it crashes. Pope John Paul II's visit in September 1987 immediately preceded the stock market decline. But, on average, apart from that occurrence, the market has seen a mostly bullish return in the days and weeks following a papal visit.

According to the 7 previous occurrences of this event, EventEdge indicates that SPX has shown a somewhat bullish edge that peaks 2 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, 15 April 2008) is Thursday, 17 April 2008. SPX rallies in 71% of the cases (5 of 7) by an average of 1.1% relative to the close on the event date. The average of the 2 declines is -0.1%. The overall return of the 7 cases is 0.8%, which, based on the close of SPX on the event date (1334.43), provides a target price of 1345.11.

Gibbons Burke³ is editor of MarketHistory.com.

Let variable values: @ = SPX theEvent = IF Date is 10/5/1965 OR Date is 9/29/1979 OR Date is 2/16/1981 OR Date is 9/10/1987 OR Date is 8/9/1993 OR Date is 10/4/1995 OR Date is 1/22/1999 OR Date is 4/15/2008 THEN 1 ENDIF Date Day t+2 t+10 t+20 t+40 t+60 10/05/1965 Tue -0.2 1.3 1.9 0.6 2.0 09/28/1979 Fri 0.2 -4.4 -8.0 -2.3 -1.5 02/16/1981 Mon 1.2 4.0 6.1 4.9 2.9 09/10/1987 Thu 1.9 0.8 -0.9 -19.8 -29.4 08/09/1993 Mon -0.1 1.0 1.7 2.3 3.9 10/04/1995 Wed 0.2 1.0 0.5 4.1 5.9 01/22/1999 Fri 2.2 1.2 3.8 5.9 6.6 04/15/2008 Tue NaN NaN NaN NaN NaN Avg 0.8 0.7 0.7 -0.6 -1.4 AvgPos 1.1 1.5 2.8 3.6 4.3 AvgNeg -0.1 -4.4 -4.5 -11.0 -15.5 PctPos 71.4 85.7 71.4 71.4 71.4 PctNeg 28.6 14.3 28.6 28.6 28.6 Maximum 2.2 4.0 6.1 5.9 6.6 Minimum -0.2 -4.4 -8.0 -19.8 -29.4 StdDev 1.0 2.5 4.5 8.9 12.7 ZStat 0.8 0.3 0.2 -0.1 -0.1 Variance 0.9 6.3 19.9 78.9 160.2 8 Occurrences

Comments:

No comments at this time.

Web Address of this trading idea:

http://www.markethistory.com/subscribe/best_of/content.html/13914.html

Links:

¹ http://www.lim.com
² http://en.wikipedia.org/wiki/List_of_pastoral_visits_of_Pope_John_Paul_II_outside_Italy
³ http://www.markethistory.com/staff/detail.html?s=gibbons