2015: Will the bull run end?

2015

It’s hard to believe another year is nearly over – soon we’ll turn our calendars to 2015. Based on historical seasonality patterns it could be a very good 12 months on Wall Street.

For starters, next year is the third year of President Obama’s presidential term and according to BTN Research, the S&P 500 has been positive 19 out of the last 20 times in year three of the presidential election cycle.

2015 also happens to end with the number 5 – significant because the Dow has averaged a much stronger return in these years than in years ending in 0, 1, 2, 3, 4, 6, 7, 8 or 9. StockTwits reported recently that the Dow has been up in the fifth year of a decade 11 out of the past 12 times with the single down year in 2005 producing a barely negative return of 0.61%.

I pay attention to seasonal trends in US equities. However, I don’t allow them to guide my trades. Seasonality gives the climate, but it’s the stock ticker telling me the weather.

 ♦ Please note that my readings will change without notice,  so please don’t buy or sell solely based on anything you read in this blog. ♦

Happy Thanksgiving

thanksgiving-sugar-maple-leaves

With Thanksgiving right around the corner, USA Today published an article looking at the historical returns of the S&P 500 in the days surrounding the holiday.  Regardless of the time frame you analyze, Thanksgiving week has traditionally been bullish for US stocks.

Over the last 68 years, this week the S&P 500 has averaged a gain of 0.64% with positive returns 67% of the time. Looking ahead, between Turkey Day and December 31st the S&P 500 has ended higher 70% of the time with an average gain of 1.77%.

On a personal note, as we all reflect Thursday on that for which we are grateful, I offer my thanks to my clients and subscribers for your business and wish you a joyous holiday season.

♦ Please note that my readings will change without notice,  so please don’t buy or sell solely based on anything you read in this blog. ♦

 

September’s seasonality

On Friday investors closed the books on the month of August, just ahead of the long Labor Day weekend, and this marks the unofficial end of summer on Wall Street. A number of the market indexes I track traded at or near all-time highs on August 29. What can we expect from US equities over the coming month?

screen-shot-2014-09-01-at-7-01-44-pmHistorically the S&P 500 has been weak in September — a softness in performance that’s often accompanied by an uncomfortable uptick in volatility. Check out the chart to the right from Bespoke for a monthly performance comparison over the past 20, 50 and 100 years (click to enlarge).  It’s not just the S&P 500 displaying this seasonal pattern. The Stock Market Almanac reports that “Since 1950, September is the worst performing month of the year for DJIA, S&P 500, NASDAQ (since 1971) and Russell 1000 (since 1979).” Gulp.

However, before you make a mad dash for the exit door, keep in mind that August is another typically lousy month for US stocks and yet the S&P 500 just posted its best August return in 14 years. Performance data below is also courtesy of Bespoke.

♦ Please note that my readings will change without notice,  so please don’t buy or sell solely based on anything you read in this blog. ♦