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Jakarta Post

Market forecast: Buy cloudy, sell sunny

  • Rayenda Brahmana

Jakarta   /   Mon, August 8 2011   /  08:00 am

The next time you are about to trade securities, you may first want to check if it’s sunny outside.

If you remember a fairytale about a lonely sad toad that asked the rain to accompany him, or a TV program for babies called Teletubbies who wait for sunny days, you, as an investor, may end up as a toad or a Teletubby. It’s true! Believe it or not, whether it’s stormy or sunny outside it will influence your stocks and profits.

That’s the conclusion of several studies that have been circulating for some years, information that is not widely recognized by stock market practitioners.

The first research paper discussing the relationship between the weather and the stock market was written by Edward M. Saunder, a researcher at the University of Massachusetts, in 1993.

He found that the cloud cover in New York had an effect on the US stock market. Recently, ...