Preparing a Trade List for the Last Week of 2009

James Altucher knows what I know about the Santa Claus Rally…that the last week of the year is often fertile ground for rallies in lower quality stocks.  I don’t recommend that anyone attempt this type of thing unless they are an experienced and aggressive trader.

First, some last week of the year statistics (from the WSJ):

  • Since 1950, the S&P has been up 76% of the time on the last week of the year.
  • On random weeks since 1950, the S&P has only been up 56% of the time, so the last week is particularly bullish.
  • If the market is up more than 10% on the year going into the last week (which has happened 27 times since 1950), then in 85% of those years the S&P has been up on the last week.

So if next week has a decent chance at following that pattern, how is Altucher picking his names for the trade?  He’s looking for short squeezes.  His list includes Blue Nile (NILE), Travelzoo (TZOO), Scholastic (SCHL).

Click over to see why…

Sources:

Altucher’s Picks for the Last Week of the Year (WSJ)

Read also:

Santa Claus Rally: Preparing My Dumpster Diving Stock List (TRB)