Seasonal Strategies

Hot July Market Blazes Past Historical Performance

As of today’s close DJIA is up 3.18% thus far in July. S&P 500 is slightly better at 3.26% while Russell 2000 is up 3.37%. NASDAQ is best up 4.41% with another six trading sessions to go in the month. As you can see in the chart below this is well above average historical July performance at this point of the month over the last 21 years. Early month strength (trading days three, four and five) was substantially greater this year while weakness around trading days six and seven was also more pronounced. Mid-month strength was similar in magnitude (trading days eight through twelve/thirteen) and thus far the market has avoided any meaningful weakness in the second half of the month.

In today’s mixed trading session DJIA did finish lower by 13.83 points. This decline with Friday’s 6.38 DJIA point decline is sufficient to satisfy our criteria for a Down Friday/Down Monday Warning (DF/DM). In recent bull market years, subsequent declines have been mild and/or brief. The actual decline on Friday and Monday was small, so if DJIA quickly recovers, then today’s warning could have little or no consequences however, if DJIA’s struggles persist it could easily surrender its July gains before the month ends.

July Seasonal & 2018 Chart