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Seasonality

Nov 07 2019

VLT Complicates The Market Puzzle

  • Nov 7, 2019

At October’s close, a long-term BUY signal was triggered on the Russell 2000. The fact that some market segments are triggering “oversold BUYS” when blue chips are at record highs speaks volumes about the internal disparities that have developed during the last few years. The Russell BUY signal is not inconsistent with our belief that the action since the January 2018 peak remains part of a lengthy cyclical topping process.

May 07 2019

Sell *Beta* In May

  • May 7, 2019

The six-month stretch beginning in May generally coincides with a narrow stock market in which non-cyclical and low volatility stocks tend to be the winners. Hence, don’t “sell” in May, but rather, tilt away from beta and away from “breadth.” These seasonal switching strategies have 70% batting averages.

Dec 07 2018

Bull Pause, Or Bear Paws?

  • Dec 7, 2018

The old maxim says that when the bears have Thanksgiving, the bulls have Christmas.

Nov 09 2018

Have We Already Had The Year-End Rally?

  • Nov 9, 2018

In the March Green Book, we discussed the long history of stock market difficulties during mid-term election years. Incredibly, nine of the past 11 cyclical bear market lows have occurred in these years, with eight of those nine recorded during the seasonally-weak months of May through October (Table 1).

Oct 05 2018

Seasonality Set To Favor The Bulls

  • Oct 5, 2018

Our bearish stance could be tested by the arrival of the seasonally strongest six-month window of the four-year electoral cycle. Since 1926, November of the mid-term year through April of the pre-election year has produced an average un-annualized S&P 500 +16.4% total return.

Aug 17 2018

Stock Market Defies Seasonal Gravity

  • Aug 17, 2018

“That which does not kill us, makes us stronger” might be a good motto for this never-ending bull market. The bull continues to shrug off the effects of both Quantitative Tightening and an escalating trade war, and it’s doing so during a seasonal stretch in which many of its predecessors have sunk to their knees (if not their demise).

Dec 07 2017

Seasonality And Market Breadth

  • Dec 7, 2017

While the FANGs—and, lately, the Dow stocks—are the market’s undisputed leaders, it’s difficult to argue the market has narrowed in a fashion that’s indicative of a “distribution” phase.

Aug 05 2017

VLT Goes “Quiet”

  • Aug 5, 2017

Last year’s “low-risk” BUY signals from our Very Long Term (VLT) Momentum algorithm have proven very profitable, but enough time has elapsed that they should no longer be considered an important bullish factor.

May 05 2017

Small Cap Seasonality

  • May 5, 2017

We’ve seen several pundits’ analyses of the “Sell In May” phenomenon of late, but none of them has addressed the most salient feature of this anomaly, which is that it’s historically been a predominantly Small Cap phenomenon.

Oct 07 2016

How To Beat The S&P 500 With The S&P 500

  • Oct 7, 2016

While 2016 is shaping up to be one of the most difficult years ever (on a relative basis) for active equity managers, one cannot blame the usual culprit of “narrow” market participation.

Sep 08 2016

EM: The Case For Waiting...

  • Sep 8, 2016

We’ve mentioned that concerns over potential seasonal weakness in September and October seem pronounced this year, perhaps because the year has so far turned out a pleasant surprise following its horrendous start.

May 06 2016

Sell In May: Statistical Update

  • May 6, 2016

If this year’s interest in the “Sell In May” phenomenon is any indication, there remains plenty of skepticism surrounding the market’s recent rebound. The good news is that the “Sell In May” play has been weakest during presidential election years.

Oct 07 2015

Year-End Rebound?

  • Oct 7, 2015

We reviewed 100 years of evidence for the Dow Jones Industrials Average and found no compelling evidence for a “bounce” effect. Contrary to expectations, fourth quarter Dow performance has (on average) been stronger when the index has already booked a gain through the first nine months.

May 08 2015

It’s That Time Of The Year

  • May 8, 2015

Seasonality rests one rung above witchcraft in the pecking order of respected analytical techniques, yet our studies haven’t been able to refute its validity. We simply don’t understand why calendar phenomena that have persisted for decades should still be around.

Nov 07 2014

A Game Of ‘What If?’

  • Nov 7, 2014

Considering the Major Trend improvement, new bull market highs (Nov. 6th) on the S&P 500, DJIA, and DJ Transports, we present a list of talking points we’d use if forced to make a bullish stock market case.

Aug 07 2014

The Worst Of The “Window” Is Upon Us

  • Aug 7, 2014

Three months ago, our “Of Special Interest” section reviewed the historically pronounced effect of the well-known “Sell In May” phenomenon during mid-term years of the presidential election cycle.

May 07 2014

A Quick Take On Time Cycles

  • May 7, 2014

We stop short of embracing any sort of fixed stock market time cycle, but it's statistically difficult to discredit certain calendar patterns.

May 07 2014

Sell in May

  • May 7, 2014

This does not only apply to stocks, it applies to just about all risky assets.

Sep 10 2013

Market Internals: The Good And The Bad

  • Sep 10, 2013

Leadership isn’t warning of impending weakness in either the U.S. economy or the stock market. Market breadth, on the other hand, is highlighting risks that aren’t evident when inspecting leadership alone.

May 01 2013

What To Sell, If Selling In May

  • May 1, 2013

Those inclined to sell in May should sell Small Caps. If you don’t have Small Caps, sell Cyclicals, at least for the next six months.

May 05 2007

Sell In May: Reformulated For The Fully-Invested

  • May 5, 2007

While the “Sell in May” market phenomenon has become part of Wall Street lore, the sector implications of this seasonal pattern are less well-known.

Feb 05 2006

February 1st: Investors' Groundhog Day

  • Feb 5, 2006

We wondered whether or not strong relative sector price action during January tended to persist for the remaining eleven months of the year. During the last 16 years, evidence proves that the strength does persist.

Feb 05 2005

Is January Performance Predictive?

  • Feb 5, 2005

A look at the January barometer, indicates there is not much evidence that a weak January market portends weak performance in the remainder of the year.

Dec 05 2004

January Effect: Now Tends To Arrive In December

  • Dec 5, 2004

The January effect still lives…..it just comes a month earlier in December.

Oct 05 2003

Into The Home Stretch…..2003

  • Oct 5, 2003

Octophobia 2003…..The stock market has nothing to fear but fear itself. The financial system is awash in liquidity, the economy stronger than anticipated and investor confidence is returning.

Jan 05 2003

The Year That Was

  • Jan 5, 2003

Remain bullish on the stock market, but don’t expect Main Street to be a major stock market factor in 2003. Today’s bull market expectations for the DJIA, S&P, and NASDAQ.

Feb 05 2002

A Disappointing Start

  • Feb 5, 2002

The “seasonals” were with us, but have yet to produce positive results. “V” shaped economic recovery conviction stronger than a month ago.

Jan 04 2002

....The Year That Was

  • Jan 4, 2002

Looking Back: The best thing about 2001 is that it is over. Looking Forward: The seasons are with us as January is statistically the strongest month of the year.

Apr 03 2001

April Is The "Opportunity" Month

  • Apr 3, 2001

Bear market broadened out in late March to include other than technology sectors. Never before have so many lost so much.…There is plenty of blame to go around. Academia, The Street, the Media, the “Experts” to name a few.

Feb 03 1999

Big Caps Hot Out Of The Starting Blocks

  • Feb 3, 1999

It’s no secret that the term “January Effect” has taken on a different meaning in recent years. Once a reference to the price bounce that underperforming small caps stocks receive as year end selling pressures dissipate, it has now been adopted by commentators to describe the unconstrained rally of large cap stocks, as the seasonal flood of cash pouring into big cap growth funds is invested

Dec 05 1998

Bullish...At Least for a While

  • Dec 5, 1998

The public is back as evidenced by strong mutual fund cash inflows. Seasonally strong Q1 mutual fund inflows should push the DJIA above 10,000. Traditional “January Effect” may be absent again in 1999, as it has previous four years.

Nov 04 1998

October Mutual Fund Flows

  • Nov 4, 1998

Public confidence measures have taken some sharp declines in recent weeks but mutual fund investors have cautiously returned as net buyers. Meanwhile the mountain of cash in U.S. focus equity mutual funds has climbed to $125 billion.

Dec 02 1997

The Current Stock Market Environment

  • Dec 2, 1997

After wavering in neutral several weeks, Major Trend Index turned negative November 24...Go to sidelines. Market rallied strongly in November but fund investors uncharacteristically stayed on the sidelines. Is this increased caution or seasonality?

Sep 05 1997

How Was Your Summer Holiday?

  • Sep 5, 1997

Major Trend Index faded to High Neutral in August, but will likely be propelled back to Positive by strong September 2nd market…Valuations still off the charts, but new valuation era looks like it’s still with us.

Jun 05 1997

Worth Noting

  • Jun 5, 1997

Balanced budget agreement assumes current economic expansion will run about 12 years, longer than any other in history.

Sep 05 1996

August: Few Surprises

  • Sep 5, 1996

The stock market performed pretty much as expected in August, although experiencing a somewhat unusual fade at month end. Major Trend remains negative. Some improvement but still a long way from Neutral.

Feb 05 1996

It’s A Big Cap Market

  • Feb 5, 1996

No January effect this year. It was a large cap show, with the DJIA (+5.4%) outperforming 85%-90% of stock groups and sectors for the month and the S&P trouncing about 70%.

Nov 05 1995

If We Make It Through November…..

  • Nov 5, 1995

Weighing In: Updating positives and negatives for stocks...adding earnings momentum as a positive.

Oct 05 1995

Navigating the Treacherous September, October, November Period

  • Oct 5, 1995

Weighing In: Updating positives and negatives for stocks...technology leadership is fragmenting — shifting this positive to neutral.

Jun 05 1994

1994: A Dull Summer?

  • Jun 5, 1994

Downside equity market risk viewed as significant: still believe 90% probability we are in early stages of a bear market. Could be a dull summer?