It’s Friday the 13th.
Art Cashin, the veteran trader at UBS Financial Services, notes that stocks tend to rally on Friday the 13th up to 60% of the time, despite all the myths associated with the day.
In note Friday, Cashin also explains how traders dealt with the fear of this date in a tradition that’s sadly disappeared. New York Stock Exchange traders called it Hat Day, and they wore headgear to ward off evil spirits.
From his note:
“We think the negative myth may be based on a novel published back around 1910. It told of a plot by an evil stock trader (ain’t they all) to crash the market on Friday the 13th.
By a numerical oddity, the 13th of the month falls on a Friday more than any other day. In the last 400 years, we have had 688 Friday the Thirteenths.
…Prior to 1988, floor brokers used to have fun with the myth by declaring Friday the 13th “Hat Day”. Brokers would don silly and bizarre headgear, pretending to ward off the evil spirits.
The last official “Hat Day” occurred in 1987. It was on Friday, November 13th, to be exact. A few weeks earlier on Monday, October 19th, U.S. stock markets had suffered their worst selloff in history. The Dow fell 20% in one day. That would be the equivalent of a 3,500 point selloff today. The ’87 crash was far, far worse than the ’29 crash on a percentage basis. As that day wore on and prices continued to fall and fall, the floor took on a kind of surreal atmosphere, almost like a dream sequence in a movie. You bargained and fought for good prices but there was a sense that this was unreal — that this couldn’t really be happening.”
Cashin writes that many traders lost their careers after the crash. The following Hat Day became some sort of “Survivors Ball” for the investors that made it out.
The exchange closed the visitor’s gallery and cancelled press passes for the day so that the survivors had the floor all to themselves.
However, a freelance reporter managed to gain access for an interview and stayed to document the whole day. Months later, he published a story with the headline “The Fat Cats in Hats.”
“That was the last “Hat Day” on the NYSE,” Cashin writes. “They are sorely missed.
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