Behavioural Finance: the close of the first week of January

Reality of last years, in particular, has made this another rule ready to garbage and to be disowned.

We study FTSEMIB and DAX market in the last 14 years, from 1999, simply taking the variation of the first week of the year (positive or negative) and comparing this result with the last close of the relative year.

The results in the follwing tabe:

  N° of cases (years)    |        Discordance     |      Concordance   |         Total
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FTSEMIB                    |             6                |              8              |         14
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DAX                           |              4                |              10            |         14
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Conclusions: the rule according to which "if the close of the first week of the year is positive (negative), so the Stock market for that year will be positive (negative) in general" is another NOT rialible rule, coming from the planet of the studies about the so called "Behavioural Finace".
For the Italian market (the typical case of a turbolent market) we are sensationally near to head or tails (7 cases each!), for the German one the margin of error is however too big (almost 1/3 of the events).Any source