Oct. 9 has loomed large in stock-market history. Why investors still shouldn't buy into an October jinx.

By Mark Hulbert

Two major market turning points since 2000 have occurred on that date. But the explanation isn't spooky at all.

The bull market that preceded the global financial crisis topped out on Oct. 9, 2007.

Numerologically-oriented investors believe that the final top of the bull market could be this coming Friday, Oct. 9.

That's because not just one, but two, major market turning points since 2000 have occurred on that day. One was the top of the bull market in 2007 that preceded the global financial crisis (in which the S&P 500 SPX fell 56.8%), and the other was the bottom of the bear market after the dot-com bubble burst (the S&P 500 more than doubled over the subsequent four years).

There's nothing suspicious or mysterious about Oct. 9, however. Given the number of major bull and bear markets that have occurred in U.S. history, it actually would have been unusual if several did not begin or end on the same month and day.

Remember the birthday paradox from your mathematics class? It focuses on how many people need to be in a group before you should bet that two of them share the same birthday. The answer, which almost everyone gets wrong, is just 23. Given that there have been 76 major market turning points since 1900 (according to the calendar maintained by Ned Davis Research), we should expect more than just one market turning point to share the same month and day. And sure enough, there are: Besides Oct. 9, there is Jan. 5, Apr. 28 and Sep. 21.

The case against 'Octoberphobia'

This focus on Oct. 9 comes on top of a widespread belief that the entire month of October is somehow jinxed. Jeffrey Hirsch of the Stock Traders Almanac Newsletter refers to this as "Octoberphobia."

Hirsch focuses on major market turning points since World War II, and it certainly appears as though he has a point. Of the 48 major market turning points that have occurred since WWII (in the Ned Davis Research calendar), seven have taken place in October - double what that number would be if the turning points were spread equally across all months.

It's doubtful that this is anything more than a random fluke, however. If we expand our focus to all turning points since 1900, October no longer has the most - as you can see from the accompanying chart, September now has this honor - nine versus eight for October. Between 1900 and the end of WWII, in fact, just one major market turning point occurred in October.

Be my guest trying to come up with a plausible explanation for why the market's major turning points would, prior to WWII, mostly avoid October, and then favor that month thereafter. Absent such a theory, the obvious conclusion is that there's nothing special about October.

None of this discussion means the current bull market won't come to an end this month, or this Friday in particular. But if it does, it won't be because of the particular month and day on which it does so.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com

-Mark Hulbert

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10-06-26 1637ET