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‘Turnaround Tuesday’? Don’t Forget Black Tuesday

‘Turnaround Tuesday’? Don’t Forget Black Tuesday

Posted by on May 24, 2013 in Blog, Featured, Posts |


By Jason Zweig

11:00 am ET  May 21, 2013

If the Dow closes up today, it will be the 19th Tuesday in a row on which the index has risen, my colleague Steve Russolillo and Zero Hedge note this morning.

The belief that stocks do better on the second day of the trading week already has a nickname, Turnaround Tuesday, and has caught the attention of lexicographer Barry Popik, who observes that the term was appropriated – as only Wall Street could do without scruple – from the civil-rights movement.

Some analysts are apparently trying to figure out what this run of positive returns “means.”  But such a string of gains on Tuesdays is almost certainly nothing but a statistical fluke, the sort of streak that is a defining characteristic of a random system but that erroneously strikes many people as proof that the system isn’t random.

Above all, Turnaround Tuesday is a reminder of Wall Street’s most enduring mental handicap: amnesia.

Tuesdays haven’t always been a lucky day. Far from it.

Crash days on Wall Street have been called “black” since at least 1869, when Jay Gould’s attempt to corner the nation’s gold supply triggered an epic collapse in gold and stock prices on “Black Friday,” Sept. 24, 1869. As long ago as the 1890s, the occasional catastrophic drop on that day was already being called Black Tuesday.

And the devastating collapse of Oct. 29, 1929 – in which the Dow plunged 18.54% in panicky intraday trading and closed down 11.73% – was instantly christened Black Tuesday.

For decades afterwards, survivors of the Great Crash would cringe if you uttered the words “Black Tuesday” in their presence; in interviews I did with each of them years ago, I saw the late Roy Neuberger and Phil Carret, who both were “there,” give a shudder at the words.

So enjoy these Turnaround Tuesdays while they last. But don’t imagine for a moment that the market will keep going up on Tuesdays indefinitely – or forget that when it does go down on Tuesdays, it can go down a little bit or like a ton of bricks.

Source: WSJ.com, Total Return blog


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