As hard as it is to believe, Labor Day's right around the corner.
But while everyone's planning their unofficial "end of summer" barbecues and beach parties…
I'm watching something else.
You see, there's a very lucrative pattern forming in the stock market right now.
It's happened in eight of the last 10 years in the weeks leading up to and shortly after the holiday.
It's got the power to put triple-digit gains in your pocket – in less than two weeks.
And there are two unique ways to play it – before time runs out…
Fatten Your Pockets Trading Currencies Before and After Labor Day
The CurrencyShares Euro ETF (NYSE Arca: FXE) tracks the euro versus the U.S. dollar. While many people try to fundamentally predict where these two currencies will trade at any given time using global economics, I prefer to spot those historically high-probability, short-term moves of an asset.
And over the last 10 years, FXE has dropped around 80% of the time during the month before and risen 80% of the time the month after Labor Day.
Now I realize this may seem like a bold statement to make. So let me show you the best way I know how… with quantitative data:
In the table above, you can see where I've used my proprietary tools to scan and back test the past decade on FXE to see how this asset's moved in the 30 days before Labor Day. Now as a pattern trader, I like to see "bunching," meaning I want to see a move in the same direction over a variety of days.
Based on the data above, we can see a bearish movement in this ETF lasting anywhere from six to 26 days…
…which tells us that the topline best pattern to play is a bearish one on FXE during the 25 days leading up to Labor Day. Historically, doing so resulted in a .91% average drop in the price of the ETF, which is a great for profits in a bearish position.
So what does the data say about trading FXE after Labor Day?
About the Author
Tom Gentile is one of the world's foremost authorities on stock, futures and options trading.
With more than 25 years' experience trading stocks, futures, and options, Tom's style of trading systems and strategies are designed to help individual investors propel themselves past 99 percent of the trading crowd.