So I once spent a whole month data mining the Dow. I learned that sunny days in Manhattan outperform cloudy days. Mondays outperform Fridays. The 3rd quarter is typically dismal, and the 4th quarter is historically the best. So if you conglomerate this data and leverage the Dow Diamonds, you can theoretically make money by buying Dow calls on a sunny Monday in November, right? I’m not sure if anyone’s ever had the guts to start a sunny-day-hedge-fund, but I would be very interested to hear the results!
Anyone interested in technical analysis and data mining should check out this fascinating site, DeepMarket.com. You can examine correlations between stocks – in tandem or apart. You can even study seasonal analysis – what historically is the best day of the year to buy Google? (Answer – August 20 averages 6.73%). I have no idea how Eric Cahoon has built these data mining tools – he must be some kind of genius. If you don’t know Deep Market, go check it out, play with the tools, and read Eric’s daily blog. Big thumbs up.