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July 2021 Market at a Glance

Seasonal:

Neutral. July is the first month of the second half of the year and has the most bullish record in Q3. Post-election-year Julys rank #1 for DJIA, S&P 500 and NASDAQ. But July is also the first month of NASDAQ’s “Worst Four Months” and early July strength has a tendency to fade around mid-month. NASDAQ’s Mid-Year Rally ends on the close ...

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July 2021 Outlook: Midyear Rally Yields To Doldrums Mid-July

The rotation back into tech and growth stocks has picked up momentum on the prospects that recent rampant inflation fears are a bit overblown. The retreat in Treasury bond yields and the more tranquil bond market suggests the spike in prices is more transitory than the extremes some market observers and investors have been suggesting. In turn, NASDAQ’s midyear rally appears to be running ahead of schedule.

We remain in the transitory inflation camp. Sure it will likely ...

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Almanac Update July 2021: Best Month of Post-Election Years

July historically is the best performing month of the third quarter however, the mostly negative results in August and September tend to make the comparison easy. Two “hot” Julys in 2009 and 2010 where DJIA and S&P 500 both gained greater than 6% and strong performances in 2013 and 2018 have boosted July’s average gains since 1950 to 1.3% and 1.1% respectively. Such strength inevitability stirs talk of a “summer rally”, but beware the hype, as it has historically been ...

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June 2021 Market at a Glance

Seasonal:

Neutral. June is the last month of NASDAQ’s “Best Eight Months” and the second month of DJIA’s and S&P 500’s “Worst Six Months.” In post-election years, June is second worst for DJIA and third worst for S&P 500. NASDAQ and Russell 2000 have been stronger with average gains of 0.4% and 1.2% respectively.

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June 2021 Outlook: NASDAQ Best 8 Months Ends – Sideways Summer Trading

Stocks have gone virtually nowhere since Stock Trader’s Almanac April 22 Best Six Months MACD Seasonal Sell Signal. Trading volume has already begun to slowdown as it tends to do from Memorial Day to Labor Day in what we refer to as the summer doldrums. This reduction in trading volume (page 48, STA 2021) both contributes to and is emblematic of seasonal market weakness during the Worst Six Months May-October (page 147, STA 2021) and the Worst Four Months July-October ...

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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 ...

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Almanac Update May 2021: Stronger in Post-Election Years

May officially marks the beginning of the “Worst Six Months” for the DJIA and S&P. To wit: “Sell in May and go away.” Our “Best Six Months Switching Strategy,” created in 1986, proves that there is merit to this old trader’s tale. A hypothetical $10,000 investment in the DJIA compounded to a gain of $960,943 for November-April in 70 years compared to just $1,656 for May-October. The same hypothetical $10,000 investment in the S&P 500 compounded to $788,997 for November-April ...

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May 2021 Outlook: Muted Market Action Anticipated Over Worst Six Months

Seasonality remains back to normal and it appears from all our observations that it will continue to track historical patterns for the remainder of the year. April’s solid returns across the board led by S&P 500 (up 5.2%) and NASDAQ (up 5.4%) and new highs for DJIA, S&P 500 and NASDAQ capped off a banner Best Six Months. DJIA is up 27.8%, S&P 500 is up 27.9%, NASDAQ is up 28.0% and the Russell 2000 is up an amazing 47.3% ...

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S&P 500 Up Over 10% First Four Months – Preceded Flat May to late-October

As of yesterday’s close, S&P 500 was up 11.5% year-to-date. Provided these gains hold through the end of April, this year will be just the seventeenth time since 1950 that the S&P 500 has finished the first four months of the year with a gain exceeding 10%. The best January to April span occurred in 1975, up 27.3% (S&P 500 was in the early stages of a new bull market following the bear ending 10/3/1974 in which the S&P 500 ...

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