Looks like the mean reversion correction we have been expecting is upon us, but this should set up the next leg up and August is the #1 NASDAQ month in election years. Agriculture made August a great stock market month in the first half of the Twentieth Century. It was the best DJIA month from 1901 to 1951. Now it is the worst DJIA and second worst S&P 500, NASDAQ, Russell 1000, and Russell 2000 month over the last 36 years, 1988-2023 with average performance ranging from 0.1% by NASDAQ to a –0.9% loss by DJIA. In 2022, DJIA, S&P 500, NASDAQ, and Russell 1000 all declined over 4% in A ..read more

2024 is a unique year. Up until Sunday afternoon we had the same two presidential candidates both running for second terms for only the second time in our history. This had reduced the uncertainty factor across the board for election year 2024, likely a substantial contributing factor to the market’s outsized gains so far this year. VP Kamala Harris, currently the likely Democratic candidate, is also a known entity with similar policy positions as President Biden. So, with two known entities running across the backdrop of a robust economy and an AI technology macro trend Wall Street is likely ..read more

In a typical year, barring any external event triggers, trading activity typically begins to decline around the July 4th holiday towards a summer low usually in late August. We refer to this summertime slowdown in trading as the doldrums due to the anemic volume and uninspired trading on Wall Street. Fading summer volume is also why many summer rallies tend to be short lived and can be quickly followed by a pullback or correction. Click here to view chart full size… Click here to view chart full size… Above are plotted the one-year seasonal volume patterns for the NYSE since 1965 and since ..read more

Dynamic trading often accompanies the first full month of summer as the beginning of the second half of the year brings an inflow of new capital. This creates a bullish beginning, middle, and a mixed second half. On average, over the last 21 years, nearly all of July’s gains have occurred in the first 13 trading days. Once a bullish day, the last trading day of July has had a bearish bias over the last 21 years. In election years since 1950, July has tended to be a dull month filled with choppy trading. Trading on the day before and after the Independence Day holiday is often lackluster. Volu ..read more

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. “Hot” Julys in 2009 and 2010 where DJIA and S&P 500 both gained greater than 6% combined with strong performances in 2013, 2018, and 2022 have boosted July’s average gains since 1950 to 1.4% and 1.3% respectively. DJIA, S&P 500, NASDAQ and Russell 1000 have been up nine straight Julys (2015-2023). Russell 2000 has been up seven times in the same period (down in 2015 and 2021). Such strength inevitability stirs talk of a “sum ..read more

Trading the three days ahead of the July 4th Independence Day holiday has historically been stronger than the days after the holiday. Trading on the day before and after the holiday is often lackluster. Volume tends to decline on either side of the holiday as vacations begin early and/or finish late. Since 1980, DJIA, S&P 500, NASDAQ and Russell 2000 have recorded net losses on the day after. This has become more pronounced in recent years and was the case again last year. However, over the past thirteen years since 2011, trading after Independence Day has softened notably. DJIA has decli ..read more

July’s first trading day is the third best performing first trading day of all twelve months with DJIA gaining a cumulative 1679.02 points since 1998. Over the past 21 years, DJIA’s first trading day of July has produced gains 81.0% of the time with an average advance of 0.38%. S&P 500 has advanced 90.5% of the time (average gain 0.46%) since 2003 but has been up 13 straight years in a row on the first trading day of July. NASDAQ has been similarly bullish advancing 85.7% of the time (0.51% average gain). No other day of the year exhibits this amount of across-the-board strength, which su ..read more

I remain bullish on 2024. My 2024 Annual Forecast released on December 21, 2023 is on track, yet the market has already achieved (and slightly surpassed) my Base Case Scenario of average election year gains of 8-15%. While my Best Case Scenario of 15-25% is likely now in play with the market running well above any of the historical seasonal patterns I can concoct, the market may be due for a little reversion to the mean. The charts here illustrate the three most relevant seasonal patterns: All Election Years, election years with a Sitting President Running for reelection and my STA Aggregate ..read more

In the mid-1980s tech’s influence in the market began to grow and the market’s focus in early summer shifted to the outlook for second quarter earnings of technology companies. In anticipation of positive results, over the last three trading days of June and the first nine trading days in July, NASDAQ typically enjoys a rally. This 12-day run has been up 30 of the past 39 years with an average historical gain of 2.5%. Look for this rally to begin around June 26 and run until about July 12. After the bursting of the tech bubble in 2000, NASDAQ’s mid-year rally had a spotty track record from 20 ..read more

After many years as a crypto and Bitcoin skeptic I teamed up last year with Adrian Zduńczyk, CMT @crypto_birb to study Bitcoin seasonal patterns and trends. Our “Seasonality of Bitcoin” white paper came out September 26, the day of the average annual seasonal low. With $BTC continuing to track its seasonal pattern I would not be surprised if the original cryptocurrency settled into another textbook September seasonal low buy point this year as well Last year BTC’s September low was a bullseye buy. Bitcoin nearly tripled from the September low of about 25,000 to the high this March just shy of ..read more