Please note ThinkMarkets does not provide CFD services to residents of the US.

Please note ThinkMarkets does not provide CFD services to residents of the US.

Learn To Trade
 
Indicators & Chart Patterns

Deepen your knowledge of technical analysis indicators and hone your skills as a trader.

Find your detailed guides here
Trading Glossary

From beginners to experts, all traders need to know a wide range of technical terms. Let us be your guide.

Learn more
Knowledge Base

No matter your experience level, download our free trading guides and develop your skills.

Learn more
Learn To Trade

Trade smarter: boost your skills with our training resources.

Create a live account
Market Analysis
 
Market News

All the latest market news, with regular insights and analysis from our in-house experts

Learn more
Economic Calendar

Make sure you are ahead of every market move with our constantly updated economic calendar.

Learn more
Technical Analysis

Harness past market data to forecast price direction and anticipate market moves.

Learn more
Live Webinars

Boost your knowledge with our live, interactive webinars delivered by industry experts.

Register now
Special Reports

Engaging, in-depth macroeconomic analysis and expert educational content from our in-house analysts

Learn more
Market Analysis

Harness the market intelligence you need to build your trading strategies.

Create a live account
Partnership
 
Affiliate Programme

Grow your business and get rewarded. Find out more about our Affiliate Programme today.

Learn more
PAMM

Invest or become a money manager, enjoy a mutually beneficial partnership.

Learn more
Introducing Broker

ThinkMarkets ensures high levels of client satisfaction with high client retention and conversion rates.

Learn more
Proprietary Trading

Partner with us to build your own prop trading business. Enquire with our account managers today.

Learn more
White Label

We supply everything you need to create your own brand in the Forex industry.

Learn more
Regional Representatives

Partner with ThinkMarkets today to access full consulting services, promotional materials and your own budgets.

Learn more
Refer a friend

Receive $50 for you and your friend when you convert them into an active trader of ThinkMarkets.

Learn more
Partnership

Plug into the next-gen platforms and the trades your clients want.

Partner Portal
About ThinkMarkets
 
Sponsorships

Check out our sponsorships with global institutions and athletes, built on shared values of excellence.

Learn more
About Us

Find out more about ThinkMarkets, an established, multi-award winning global broker you can trust.

Learn more
Careers

Discover a range of rewarding career possibilities across the globe

Apply now
ThinkMarkets News

Keep up to date with our latest company news and announcements

Learn more
Trading Infrastructure

When it comes to the speed we execute your trades, no expense is spared. Find out more.

Learn more
Contact Us

Our multilingual support team is here for you 24/7.

Learn more
About ThinkMarkets

Global presence, local expertise - find out what sets us apart.

Create a live account
Log in Create account

Cupid Meets Dow Jones: A Valentine's Day Stock Affair

Alejandro Zambrano Alejandro Zambrano 12/02/2024
Cupid Meets Dow Jones: A Valentine's Day Stock Affair Cupid Meets Dow Jones: A Valentine's Day Stock Affair
Cupid Meets Dow Jones: A Valentine's Day Stock Affair Alejandro Zambrano

Most investors and traders are familiar with seasonal effects on the stock markets, like the Christmas rally and "Sell in May, and go away." Yet few know that Valentine’s Day also influences stock indices. So, as you gear up for a romantic time with your loved one, you now have an excuse to take another peak at your mobile and ThinkMarkets trading account
 

What is the Valentine's Day effect?  

According to academic research, there is no rational explanation for the gain we see in stocks during this period, and it cannot be attributed to strategies like tax-loss selling and inventory adjustments hypotheses. 
 

The former involves investors offloading assets at a loss towards the year's end to minimise taxes, leading to temporary price dips in affected stocks. Meanwhile, the inventory adjustment hypothesis suggests that investors take note of a company's changes in inventory levels as a clue as to whether to buy or sell the stock. 
 

Instead, academic papers suggest it is all about our mood. Valentine's Day makes investors happy, and they buy stocks more than they would on any other random day. 
 

The more a country celebrates Valentine's Day, the stronger the effect on the stock index. According to a paper published by the Chinese University of Hong Kong: Will Stock Rise on Valentine's Day?, outside of the USA, China exhibits the most profound effect, followed by France and the United Kingdom. 
 

What can you expect?  

Unlike other holidays, Valentine's Day is not a public holiday in any country; therefore, the markets are open, and you can trade this day. Stock indices like the Dow Jones (US30) and the S&P 500 (SPX500) tend to gain in the three days heading into Valentine's Day and the day itself. According to the research cited above, if we take the return for any random day, the relative gain will be almost 20% higher on the days heading into Valentine's.  
 

In a separate report by Quantifiedstrategies.com, the S&P 500 will gain two times the return gained from any random trading day, and produce return of 21.8% by just trading 2.8 days per year between 1960 and 2023.  
 

Here is the strategy they tested 
 

  • Buy Date: Purchase on February 10, or the next trading day if February 10 falls on a weekend. 

  • Sell Date: Sell at the end of trading on February 14, or the next trading day if the market was closed on the 14th.

  • Data Period: Analysis is based on data from 1960 to 2023. 

  • Expected Return: Suggests a return of 21.8% following this strategy. 

  • Duration: Positions are held for an average of 2.8 days. 

  • Average Return: The average return per trade was 0.32%. 

  • Win Rate: The strategy had a win rate of 62%. 


As Valentine's Day approaches, here's a romantic tip: share this report with your significant other, especially if they've caught you gazing at your trading account more often than into their eyes.  
 

Remember, though, that the course of true love never ran smoothly, and neither did historical market patterns. Incorporating the Valentine's seasonal effect into a broader trading strategy might be the secret ingredient to your trading account health, rather than relying on Cupid's arrow alone to hit the bullseye. 
 

Trade with ThinkMarkets and access market-leading spreads. Open an account now. 

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

Related articles:

Pound Sterling's Tightrope: Navigating the Na...

By Alejandro Zambrano

30/01/2024

Bitcoin’s Price Plummets After ETF Approval

By Alejandro Zambrano

24/01/2024

Where next after the S&P 500 hits a new all-t...

By Alejandro Zambrano

23/01/2024

From ETFs to Halvings: Unpacking Bitcoin's re...

By Alejandro Zambrano

24/10/2023

Global markets shaken by Middle East tensions...

By Alejandro Zambrano

17/10/2023

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Back to top