Author Topic: January Effect begins this week  (Read 4430 times)

Alphanator

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January Effect begins this week
« on: December 10, 2012, 10:58:08 pm »

The JE begins this week 12/2012 until first week or so in January 2013.
My understanding the plays are normally options.
Is there any value in trading the candidates?
First we have to find them.

I have heard the candidates have more cash on the books than the book value of the shares.  Essentially take-over candidates.

I first did this over at Finviz and have put together most of it below.
We need some help in finding the same in TIP.

Not sure how to trade them either.

Market Cap  over $50M                       /  Market Cap
Position in Year Range                        /  Performance = -50%  (thats down 50%)
?                                                         /   Price/Cash  (finviz: Under 2)
Debt ?                                                 /   Debt/Equity (finviz: Under 1)
?                                                         /   52-Week High/Low  (finviz: 50% or more below)
Estimated Annual EPS Growth .10      /   EPS growth this year (finviz: Positive (>0%)


Your thoughts, alterations, criticisms welcome.

http://www.trade-ideas.com/View.php?O=8000000000000000000000000_1D_0&MaxRY=-50&MinEstAEPSG=0.1&MinMCap=50&MinPrice=5&WN=January+Effect+2013&show0=D_Symbol&show1=D_Type&show2=D_Time&show3=D_Desc&col_ver=1



TradeIdeas_DA

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Re: January Effect begins this week
« Reply #1 on: December 11, 2012, 09:03:28 am »
I was able to create a custom formula as a filter for the Price/Cash parameter.

This is for people who already know how to make custom formulas. If you're just getting started, look here: http://static.trade-ideas.com/FormulaEditor/Instructions.pdf

Once logged in you can access the area where custom filters can be made: http://www.trade-ideas.com/FormulaEditor/Edit.html



You can also read several examples of custom filters on our blog: http://marketmovers.blogspot.com/2012/12/advanced-examples-for-our-formula.html

I then added it to your earlier strategy (you won't see the modification until you add the custom filter yourself)

http://www.trade-ideas.com/View.php?O=8000000000000000000000000_41d_0&MinPrice=5&MaxRY=-50&MinMCap=50&MinEstAEPSG=0.1&MaxU5=2&WN=January+Effect+2013+Modified&col_ver=1&show0=D_Type&show1=D_Time&show2=D_Symbol&show3=D_Desc
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Alphanator

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Re: January Effect begins this week
« Reply #2 on: December 19, 2012, 01:18:27 pm »
I was able to create a custom formula as a filter for the Price/Cash parameter.

Thanks for that!  Although when including in the Columns I only see "0.00", no numbers appear.  Not sure if they should or not.

I have settled on the below Strategy for watching those issues that may have some "January Effect" effect to them.  This is my interpretation, so it may not be exact.
Just google and many interpretation as to why and what of the JE are found.
There is even opinion that the JE has moved to the Nov-Dec before the ensuing January.  This seem to lend itself more to the JE occurring from the fact positions are trimmed by Institutions the Oct-31 preceding.

Summary:  this strategy finds equities that are down at least 50% in the previous year AND are now trending upward (ADX, DTI) in the past 10 days.
Note: you need to create the formula if you use the below
http://www.trade-ideas.com/StockInfo/_TopListResult.html?form=1&show0=D_Symbol&show1=Price&show2=U5&show3=UYP&show4=MA50P&show5=ADX&show6=Vol3M&col_ver=1&MinADX=25&MinEstAEPSG=0.1&MinMA50P=0.25&MinMCap=50&MinPDIMDI=0&MinPrice=2&MinU10DP=0.1&MaxRY=50&MaxU5=2&MaxUYP=-50&SL=X1o1&sort=MaxRV&X_NYSE=on&X_ARCA=on&X_AMEX=on&XN=on&WN=Top+List%3a+January+Effect+2013]http://www.trade-ideas.com/StockInfo/_TopListResult.html?form=1&show0=D_Symbol&show1=Price&show2=U5&show3=UYP&show4=MA50P&show5=ADX&show6=Vol3M&col_ver=1&MinADX=25&MinEstAEPSG=0.1&MinMA50P=0.25&MinMCap=50&MinPDIMDI=0&MinPrice=2&MinU10DP=0.1&MaxRY=50&MaxU5=2&MaxUYP=-50&SL=X1o1&sort=MaxRV&X_NYSE=on&X_ARCA=on&X_AMEX=on&XN=on&WN=Top+List%3a+January+Effect+2013[/url]

For daytrading it seems you would look for pullbacks and then go long.
Otherwise long call options could be used if you believe the issue will be up in Dec-Jan.