We enter the last week of summer today. Are we also entering the danger zone for the stock market? An econometrician named Salil Mehta has analyzed the entire history of the Dow Jones Industrial Average, and found that the very worst days tend to happen in the autumn months.
Looking at the worst 1 percent of all trading days, Mehta found that the month with the highest number was October with 45. November was next with 43, then September with 33 and December with 30. Aside from those four months, the average number of disaster days for the other eight months of the year is just 17.9.
Within those dangerous months, the worst day would appear to be Monday. Nearly 30 percent of those bottom 1 percent trading days happen on a Monday. Mehta says all these figures are statistically significant.
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