The last month of our “Best Six Months” is now upon us. So it’s the perfect time to provide a refresher for longtime readers and primer for those that have recently joined us. We do not simply “Sell in May and go away.” We employ a more nuanced and subtle approach to how we implement our Best & Worst Months Switching Strategies detailed in the annual Stock Trader’s Almanac and on www.stocktradersalmanac.com. We are
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MAR
2021
Unfortunately the February weakness we warned about last issue began to materialize mid-month and accelerated into month-end. The “excuse du jour” is rising bond yields as the 10-Year Treasury climbed above 1.5%. The reaction to the 10-Year yield moving above 1.5% could be a little overblown. It’s barely back to pre-Covid levels. Perhaps it’s more a sign of a healthy economy and rising inflation expectations, which is precisely what the Fed has been trying to foster. We’re not overly concerned ...
Continue Reading →MAR
2021
February 2021 Outlook: Robinhood Thwarts January Indicator Trifecta, Watch Out For February Weakness
It’s been a dynamic six weeks since we made our Annual Forecast for 2021 and volatility spiked the last week of January as the merry Gen Z traders made on run on the shorts of the old guard on Wall Street. Robinhood Markets and other trading apps and services and online communities used by younger up-and-coming retail traders were able to organize en masse and create an old-fashioned short squeeze. You’ve got to hand it to ...
Continue Reading →FEB
2021
Global pandemic was certainly not in our forecast last year and neither was the economic shutdown that came with it. Covid-19 has dramatically changed the world, the economy and the market forever. Some industries are still struggling, while others have adapted and changed. The “stay-at-home” economy stocks, technology in general and biotech industries are having a major impact that has been keeping the economy humming along and the market rallying to new highs.
Our outlook is bullish for next year. Covid ...
Continue Reading →DEC
2020
Stocks have been on the rise since the late-October lows in prototypical market seasonality fashion, though NASDAQ has lagged a bit. Honestly, NASDAQ tech stocks deserve a break, they have carried the market for months now as they have driven and supported the stay-at-home economy. This rotation into the reopening-economy big cap stocks and the new highs in the Russell 2000 small caps, which are more domestic-based firms, is encouraging.
The Russell 2000 index of small cap stocks is on a ...
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2020
November has historically begun the Best Six Months for the Dow and S&P 500 and NASDAQ’s Best Eight Months. It has also marked the start of the year’s Best Three-Month Span November-January. Seasonal October volatility was exacerbated by Presidential election uncertainty and the rapid rise of covid-19 cases worldwide. But we believe this is setting up very well for our Seasonal MACD Buy Signal.
Seasonality’s Quarantine Is Over
October’s market weakness and volatility is actually an encouraging sign for us. While it ...
Continue Reading →NOV
2020
Stock market seasonality has clearly been turned on its head this year. S&P 500 was down -4.1% during the Best Six Months (November-April) from October 31, 2019 to April 30, 2020, while it has been up 14.5% so far during the Worst Six Months (May-October) from April 30, 2020 through the close on September 29, 2020. However, with S&P 500 down -4.7% for September to date it appears seasonals are back in style again.
The typical end-of-September weakness is priming a ...
Continue Reading →OCT
2020
Reflecting on this historic and crazy year from the breezy climes on the southern end of Long Beach Island, New Jersey we are encouraged by the tale of the tape and the stance of monetary policy and fiscal stimulus. Two old market postulates are currently at play: “Don’t fight the tape,” and “Don’t fight the Fed.” In addition we have massive, unprecedented fiscal stimulus with little place to go but into the stock market, particularly U.S. stocks. The Fed’s new ...
Continue Reading →SEP
2020
In mid-July the market was shrugging off pandemic setbacks, bleak economic and corporate outlooks, geopolitical tensions, civic unrest and a contentious U.S. presidential election battle with NASDAQ hitting a new all-time high and S&P 500 at a new recovery high. In fact we were looking at a classic “Hot July” pattern with DJIA up 4.6% for the month as of the close on July 22.
Gains of this magnitude for July, however, have frequently been followed by ...
Continue Reading →AUG
2020
Climbing COVID cases and confusion about reopening the economy continues to confound the market. Even though hard working people and prudent businesses around the country are working diligently to reopen and safely serve clients and customers the increase in positive tests and hospitalization nationally is hard for the market to ignore.
Waiters are reminding diners to done their masks when ordering. Folks are waiting for the next elevator and not crowding in and business have hand sanitizer at the ready for ...
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2020