6 Bullish Months for a Well-Seasoned Market
You are now in the market’s sweet spot.
The major indexes pushed to all-time closing highs yesterday after a couple of weeks on pause. That means it’s time for you to check the seasonality stats to help plan your next move…
“September and October are usually bearish – but this year we saw huge gains…”
November to April is usually the best time to own stocks, according to Ryan Detrick, Schaeffer’s senior technical strategist. The numbers don’t lie. Over the last 40 years, the average November-April S&P return is more than 7.5%. In fact, Detrick says, the S&P is positive 79% of the time during this 6-month timeframe.
Score one for seasonality. Forget the financial media rants from the top-callers, bubble-guessers, and trend-deniers for now. First of all, they’ve been dead wrong all year. And secondly, almost all of the analysis calling for a major correction fails to give you any idea as to when the hammer is going to drop. “Eventually” is as close as the guesses get.
The market is moving higher. We are entering what is typically the most bullish time of the year. But of course, not every single month follows the script perfectly. Historically, September and October are rocky months. When you think of major market crashes, you think of fall. The great crash of 1929. Black Monday in 1987. Heck,even the 2008 financial crisis came to a crescendo in October.
But even with the script somewhat backwards this year, we should continue to expect gains…
“September and October are usually bearish – but this year we saw huge gains,” Detrick says. “When September and October are positive, the returns from Nov-April are much better. In fact, up 90% of the time!”
Stay fearless and trade your plan. Plenty of stocks are shaping up for a move higher as the year draws to a close. If you get spooked onto the sidelines, you could miss the conclusion of a truly historic year for the stock market…
Ed. Note: The end of the year run-up is still playing out. But knowing how to play it can be tricky. That’s where Greg comes in… Every morning, Greg gives readers of his Rude Awakening email edition a brief and honest rundown of the trading day ahead – what to expect, what sectors to focus on and 5 specific numbers you need to know. If you’re not getting the free Rude Awakening email edition, you’re not getting the full story. Don’t let that happen. Sign up for FREE, right here.