Every one’s “most favorite” time of the year when we get to hand over even more of our hard-earned earnings to the government.
With far too many of us unwilling to do our own taxes, we leave it up to trusted tax professionals. That way we don’t make mistakes with filing status, dependents, capital gains, or making dangerous assumptions. That way, we also don’t get a visit from the “friendly” IRS.
H&R Block (HRB)
HRB is a non-brainer with tax season.
Every year around this time, HRB rockets higher. We saw it happen just about every year. Not only can you make money from its potential appreciation this time of year, but you can also collect its yield of 2.75%.
Last year, HRB bottomed out at around $44 in January and tested a high of $53.55 just after taxes. Nowadays, after bottoming out at $52, we do expect for HRB to blast higher again.
Helping, CEO Jeffrey Jones reaffirmed the fiscal 2025 outlook, highlighting confidence in delivering results for the second half of the fiscal year. He noted strong performance in small business services, particularly in bookkeeping and payroll, which achieved double-digit revenue growth. DIY tax services benefited from an expanded range of custom experiences, improving conversion rates, as noted by Seeking Alpha.
Extreme openings usually only occur a dozen or so times a year and when they do, they present the day trader with some interesting opportunities. The 5-day average range is an important tool used to measure the markets current volatility. We used the 5-day average range as a ‘yardstick’ for defining an extreme opening to search 15 years of data to find those days when the S&P 500 futures opened below the previous day’s low by more than the 5-day average. In the chart below, we’ve taken all of those days and blended them together. The chart below was constructed using the intraday data for these days.
Wow – in looking at this chart we can see that these trades have a tendency to open and trade higher for the rest of the day. The average gain from the open to the close is just over 80% of the 5-day average range (during the year 2002, before commission, this would have been around $4,000 for the regular S&P and $800 for the e-mini). After an extreme downside open, the S&P has a tendency to finish higher 87.50% of the time.
But what happens when the open is below the previous day’s low, but it’s not quite as much as the 5-day average range?
The Living Oscillator is used to identify when a market is short-term overbought, or short-term oversold. The trade for a Living Oscillator ranges from a low of zero to a high of 100. The lower the Oscillator, the more oversold the market. The higher the Oscillator, the more overbought the market.
We used this Oscillator to divide these days into two groups. The first group, are those days when the trade for the Living Oscillator was below 50 (or oversold) the day prior to the extreme open. We found those days seemed to perform quite well. When these trades are filtered by the Oscillator the S&P has a tendency to finish higher around 75% of the time. The average gain for these days is over 80% of the 5-day average range.
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