Now that the downgrade we discussed in CFDAlert (on July 20, in an unposted email “Suddenly Everyone Is So Happy! Buy!!”, and in The Coming US Downgrade) has happened, it is a very open question what will happen to our markets on Monday as the STI will be acting without its usual guidance from the US.

I thought it might be interesting to have a look to see if there was a “National Day Rally” effect, partly because it would be humorous if there were and would make for good dinner conversation. The usual theory around other holidays such as the Christmas Effect and the Independence Day Effect is that traders are in a good mood and generally bullish.

In short, no, there isn’t one. In fact, people get increasingly bearish before National Day.

and after:

So, no, don’t hope for a ...