Seasonal Strategies

Almanac Update June 2021: Second Worst DJIA Month in Post-Election Years

June has shone brighter on NASDAQ stocks over the last 50 years as a rule ranking sixth with a 0.9% average gain, up 28 of 50 years. This contributes to NASDAQ’s “Best Eight Months” which ends in June. June ranks near the bottom on the Dow Jones Industrials just above September since 1950 with an average loss of 0.2%. S&P 500 performs similarly poorly, ranking ninth, but essentially flat (0.1% average gain). Small caps also tend to fare well in June. Russell 2000 has averaged 0.8% in the month since 1979.

In post-election years since 1953, June still ranks poorly and its average loss for DJIA increases to –1.1% while S&P 500’s modestly positive performance becomes a 0.6% loss. DJIA struggles the most, advancing in just four post-election year Junes (1977, 1985, 1997 and 2017). Russell 2000 fares best, up seven times in ten years with an average gain of 1.2%. NASDAQ lands in the middle, advancing 50% of the time with an average gain of 0.4%

Post-Election Year June Stats mini table

The second Triple Witching Week of the year brings on some volatile trading with losses frequently exceeding gains. On Monday of Triple-Witching Week the Dow has been down thirteen of the last twenty-four years. Triple-Witching Friday is somewhat better, up ten of the last eighteen years, but down five of the last six. Full-week performance is choppy as well, littered with greater than 1% moves in both directions. The week after Triple-Witching Day is horrendous. This week has experienced DJIA losses in 27 of the last 31 years with average losses of 1.1%. NASDAQ and Russell 2000 had fared better during the week after, but that trend appears to be fading.

June’s first trading day is the Dow’s best day of the month, up 26 of the last 33 years. Gains are sparse throughout the remainder of the month until the last three days when NASDAQ and Russell 2000 stocks begin to exhibit strength. The last day of the second quarter is a bit of a paradox as the Dow has been down 17 of the last 30 (however, up 8 of the last 10) while NASDAQ and Russell 2000 have nearly the opposite record. NASDAQ has been up 21 of the last 29.

June 2021 Vital Stats Table image