Think September Was Bad? Watch Out for 'Octoberphobia', Stock Trader's Almanac Warns

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Think September Was Bad? Watch Out for 'Octoberphobia', Stock Trader's Almanac Warns
Credit: © Reuters.

By Staff 

While September has already been a brutal month for stocks, October is a month known for famous stock market crashes, warns the Stock Trader's Almanac.

The Almanac highlighted the October stock market crashes in 1929, the famed 'Black Monday' on October 19, 1987, the 554-point DJIA drop on October 27, 1997, back-to-back massacres in 1978 and 1979, Friday the 13th in 1989, and the 733-point DJIA drop on October 15, 2008. Further, during the week ending October 10, 2008, the Dow lost 1,874.19 points (18.2%), the worst weekly decline, in percentage terms, in the firm's database going back to 1901.

"The term "Octoberphobia" has been used to describe the phenomenon of major market drops occurring during the month," Stock Trader's Almanac said. "Market calamities can become a self-fulfilling prophecy, so stay on the lookout and don’t get whipsawed if it happens."

While there may be a dark history of stock market crashes during the month, overall the month of October has been good, history shows. Over the last 21 years, the entire month of October has been a solid month for the market, ranking #3 for DJIA, S&P 500 , and NASDAQ , the Almanac notes.

"October has been a turnaround month - a "bear killer" if you will," the Almanac notes. "Twelve post-WWII bear markets have ended in October: 1946, 1957, 1960, 1962, 1966, 1974, 1987, 1990, 1998, 2001, 2002 and 2011 (S&P 500 declined 19.4%). Eight of these years were midterm bottoms."

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