Showing posts with label Seasonality. Show all posts
Showing posts with label Seasonality. Show all posts

Sunday, March 24, 2024

S&P 500 March-April 2024 Seasonality │ Jeff Hirsch & Wayne Whaley

After 5 months of solid gains, are markets ready for a pause? Bullish Presidential Cycle Sitting President Pattern flattens out the mid-February to late-March seasonal retreat considerably without 2020 in the average.

 'Best Six Months' ends in April.

April is the final month of the “Best Six Months” for DJIA and the S&P 500. From our Seasonal MACD Buy Signal on October 9, 2023, through (March 21, 2024), DJIA is up 18.4% and S&P 500 is up 20.9%. Fueled by interest rate cut expectations and AI speculation, these gains are approximately double the historical average already and could continue to increase before the “Best Months” come to an end.


This AI-fueled bull market has enjoyed solid gains since last October and will likely continue to push higher in the near-term, but momentum does appear to be waning with the pace of gains slowing. With April and the end of DJIA’s and S&P 500’s “Best Six Months” quickly approaching we are going to begin shifting to a more cautious stance. We maintain our bullish stance for 2024, but that does not preclude the possibility of some weakness during spring and summer.
 
 
 
THE CORRELATION MODEL SEES A NEGATIVE LAST WEEK OF MARCH FOR THE S&P. Provided a time frame of interest, my correlation model calculates the Correlation Coefficients (-1 to +1) for the past performance of 4165 different time frames over the prior 3 months vs the performance for the time frame of interest in search of the period which has demonstrated the most barometric acumen in predicting the performance of the upcoming time frame of interest. 
 
This week I ask the model for it’s prognosis for the S&P in the last week of March. It responded that the prior ten calendar days (Mar10-24) had a very uncanny track record of forecasting the last week of March with those 2 time frames having a very strong NEGATIVE correlation which doesn’t bode well for next week given that March 10-24 was up 1.63% this year.  
 
Note the 3-10, March 24-31 performance in the far right category below in those 13 prior years where March 10-24 was greater than 1.2% for an avg wkly loss of 0.74% with 1% moves 1-7 to the downside.  This contrasts dramatically to the 11-2 performance when March 10-24 was less than -0.5%.  Fingers crossed that it is wrong this year. 
 
The outlook for April is much brighter. 
 
  
Reference: 
 
[ oftentimes true: ]
 
In Bull Markets, New Moons are Bottoms, and Full Moons are Tops. 
In Bear Markets, New Moons are Tops, and Full Moons are Bottoms.
 
The SoLunar Rhythm in March 2024.
 
 
 
 
 

Tuesday, March 19, 2024

Election Years Are Different | Tom McClellan

I have been writing about the Presidential Cycle Pattern since 1994, using the pattern which is derived from averaging together SP500 price data in 4-year chunks of time. One difference in how I do this versus others is that I start each 4-year period as of November 1 instead of January 1, to better align with election day. This week's chart looks at the differences (and similarities) in the versions of the Presidential Cycle Pattern depending on what type of president is in office. The green line reflects first term presidents from a different party than the last president, and reflects the condition we have now.

  » March is typically a sideways month, part of a larger sideways pattern 
lasting all the way until late May. The market normally rallies from June to election day. «

[...] A lot of the time, the two patterns behave very similarly. But in March of the election year, there is a notable difference. When a first term president is in office and running for reelection, March is typically a sideways month, part of a larger sideways pattern lasting all the way until late May. March is different, though, when a second term president is in office (red line). [...] The stock market normally rallies from June all the way to election day
[November 5] when there is an incumbent running for reelection. And usually an incumbent will win reelection. That is how things normally go.
 
Larry Williams identified June 2024 in the current decennial pattern
 as  » the sweet spot with 90% accuracy « to buy and hold until December 2025

[...] This year we have a challenger who is not an unknown quantity (to Wall Street), who at the moment has a slight lead in the polls. This type of condition is totally backwards from how election years usually go.  Add to that the additional unknowns about how President Trump is facing multiple trials for alleged crimes, and we have an election year completely unlike any previous one.  So trying to run a forecast model based on how things have gone in prior election years may just not work this year.
 

Thursday, March 14, 2024

The Physics of the Seasonal Cycle | Al Larson

Any grade-school pupil can tell you when the seasons begin. In the northern hemisphere, generally, spring begins March 21, while summer begins June 21. Autumn begins September 23, and winter begins December 21. Actual dates may vary by one day in a particular year. So step one is simple.
 
The physical reason behind the seasonal cycle is the tilt of the Earth's axis. The 23.5-degree tilt of the Earth's axis causes more direct heating of the northern hemisphere in the summer, when the Earth tilts toward the sun. It causes less heating in the winter, when the Earth tilts away from the sun. This change in heating and cooling causes the seasonal weather patterns that we are familiar with.

 Charged particles from the sun form a teardrop-shaped envelope about the globe called magnetosphere.
 
Not so well known is the effect of the seasonal variation on the Earth's geomagnetic field. As the sun emits energy, charged particles flow outward, carried by the solar wind. As these particles sweep past Earth, they form a teardrop-shaped envelope around the globe called the magnetosphere.

There is a seasonal variation in two important parts of the magnetosphere. When the Earth tilts toward the sun in the summer, the charged particles can more directly flow into the north pole, where they affect the Earth's magnetic field. This effect is lessened when the Earth tilts away from the sun in the winter.
 
The second magnetic effect is on the magneto-tail, that part of the magnetosphere which streams away from the sunny side of the Earth. As the Earth tilts toward the sun, this tail "rides higher." As the Earth tilts away from the sun, the tail "rides lower." This affects how our moon, which moves in and out of the magnetosphere, interacts with the Earth's magnetic field.


So what does this have to do with stocks and commodities? Scientific evidence suggests that these fluctuations in the Earth's magnetic field affect humans. Studies show that magnetic field changes are linked to blood PH changes, which in turn cause mood swings. Perhaps the psychological mood swings of traders are also subject to these magnetic field changes.
 
More obviously, the seasonal cycle could be expected to affect crop prices, such as those of wheat, corn and other commodities. Similarly, with most businesses running on a quarterly profit cycle, seasonal variations in the buying and selling of materials and equipment can be expected. Thus, on both a fundamental and technical basis, a trader can expect season price variations in stocks and commodities.

To perform step 2, mark the dates of the cycle on a chart with solid dots, and place them above or below the price as you estimate that price is high or low relative to what it was approximately one-fourth cycle earlier. Points do not necessarily have to alternate between high and low. Now look for cycle "inversions." If two lows or highs occur in succession, the cycle has "inverted" between the points. A normal inversion point is halfway through the cycle.

Quoted from:
Al Larson (1991) - The Physics of the Seasonal Cycle.
 

Saturday, March 9, 2024

Bitcoin April 2024 Halving - Target 150K+ by October 2025 | Peter L. Brandt

Bitcoin halvings are strongly associated with past bull market trends in Bitcoin. Also, a strong correlation exists between the halvings and the timing of the associated bull trends. More precisely, in the past the halvings have been right at the half-way point of major bull cycles. In other words, the lengths of bull trends following the halving dates have been about equal to the length of the bull trends prior to the halving dates [...]
 
The 2022 to 2025 Bull Cycle
We know what HAS BEEN in previous bull cycles. We have confidence in what we already know. But projecting past price behavior into the future is highly speculative. The next halving is April 22, 2024. Assuming that the low of the current bull cycle was in late November 2022. That low was 75 weekly bars before the April 2024 halving.
 
If the bull trend extends 75 weekly bars beyond the next halving, a price high would occur in early October 2025. If the pace of the bull trend after April 2024 is at similar pace to the bull trend since the November 2022 low, then the high in October 2025 could be around $150,000. 
 
However, the post-halving advances during previous bull cycles have been much steeper than the pre-halving advances.
 
 
 
 
 

 

Friday, March 8, 2024

Gold Breakout - Target 2,530 to 2,700 | Peter L. Brandt


This is a FOR REAL breakout in Gold. Goldfinger points to a target range of 2,530 to 2,700.
 
 
June is typically the lowest month for Gold. 
The graph is based on the average prices; there are times when June tops rather than bottoms. 
Buy dips around monthly pivot levels. 

Friday’s Commitment of Traders (COT) Report from the CFTC had an interesting point about gold. The big money "commercial" traders responded to the rally in gold this week by posting the biggest jump in years in their collective net short position. This marks this week’s pop as at least a short term price top.

There has also been a big jump in total open interest lately. Usually such events mark a blowoff top in gold prices, although occasionally they are seen at a breakout point.

 Curiously, though, the small speculators in the "non-reportable" category were not chasing this week’s rally, and instead they reduced their net long position. They have not been net short as a group since 2016, so the analysis task consists in evaluating their relative net long position as a group. Having the small specs feel scared by this rally says it has some enduring legitimacy, once the short term overbought condition can get worked off. 

Wednesday, March 6, 2024

S&P 500 March 2024 Seasonality │ Jeff Hirsch

Over the recent 21 years March has been a decent performing month for the market. Average gains over the period range from a low of 0.78% by DJIA to a respectable 1.40% by NASDAQ. 
 

March typically opens positively but selling pressure and weakness tend to follow quickly thereafter with choppy trading until around mid-month. From here on the market generally rallied to finish out the month. End-of-Q1 portfolio adjustments have contributed to additional choppy trading during the last three or four trading days of March. Election year average performance is influenced by across-the-board double-digit losses in 2020, but March’s pattern is similar with weakness in the first half and modestly improved trading in the second half.
 

Saturday, March 2, 2024

ICT Seasonality | Michael J. Huddleston

 
 
We are in the quiet part of the year still.
Spring is coming to the markets very soon.

The year, if viewed as a single range ... we are in the Accumulation phase still.
Don't blow your equity before the salad days return.

January to April is the yearly Accumulation.
April to May is the Manipulation.
May to November is the Distribution.
December resets the yearly range.

Power of 3

Now go lose sleep over it in your charts.

You won't appreciate this until you pour
over all markets and asset classes and then your ass will hit the floor.
 
 
 
Time is more important than Price.

 
 
 
There are two sets of instructions that the algorithm follows:  

AMD-X and X-AMD
 
A = Accumulation (required for a cycle to occur)
M = Manipulation
D = Distribution
X = Reversal or Continuation

Wednesday, February 28, 2024

S&P 500 vs VIX and Seasonal Patterns

Corrections and short-term market peaks often coincide with exceptionally low levels of market volatility.

 
Beware of the Ides of March: This year also coincides with the seasonal decline during presidential election years where the sitting president is running. Support levels to watch in the S&P 500: 4800 old ATH and 4600 near summer 2023 highs.
 

February’s last trading day historically bearish. DJIA and S&P 500 have been down 9 straight and 11 of the last 12. NASDAQ has tried to buck the trend, up 3 of last 4 years. Potential setup for historically bullish first trading day of March.
 

Friday, February 16, 2024

S&P 500 vs NAAIM Exposure Index │ ISABELNET

The National Association of Active Investment Managers Exposure Index represents the two-week moving average exposure to U.S. equity markets reported by NAAIM members.

 The NAAIM Exposure Index, with a reading of 95.58, indicates a strong bullish sentiment among active investment managers, reflecting their high confidence in the future trajectory of the stock market (published Feb 16, 2024).

 S&P 500 and NAAIM Index above 97 (published Feb 15, 2024)

Active investment managers are notorious for buying equities at tops and selling them at bottoms, highlighting the difficulties they encounter in accurately timing the market and making lucrative investment choices.

 
Still up: The 3 Day, the 9 Day and the 18 Day cycles vs the S&P 500 Index.
 
Jeffrey A. Hirsch (
Feb 16, 2024) - DJIA S&P 500 & NASDAQ are all up 7 of last 12 days after the Presidents’ Day, but long-term record remains weak. Since 1990, average performance ranges from –0.56% for NASDAQ to –0.28% for DJIA. 
Sizable declines in the last 2 years have worsened the record.

Tuesday, February 13, 2024

S&P 500 Seasonality Weak from Mid-February to Mid-March │ Jeff Hirsch

The big round number 5,000 is proving to be resistant. It will likely take a few attempts to break through. February’s notorious seasonal weakness is bound to relieve the market’s obviously overbought condition. This is not out of the ordinary for February even into March.

 
This usually mild retreat (around 4% on average) from mid-February to mid-March in election years with a sitting president running for reelection could be a good opportunity to establish new or add to existing positions. Election year seasonal patterns suggest respectable full-year gains. 

Friday, January 26, 2024

S&P 500 Seasonal Pattern for February 2024 | Jeff Hirsch


Typical February Performance: Weakness After Mid-Month Peak - After a strong opening day, strength has tended to fade until around the seventh trading day. From there until around the 12-trading day all five indexes have historically enjoyed gains. But those gains have not held until the end of February with a peak occurring around mid-month. By the end of February, only NASDAQ and Russell 2000 have remained slightly positive while DJIA, S&P 500, and Russell 1000 turn negative.


 
 

Sunday, January 21, 2024

2024 Turn Of the Year (TOY) Barometer Very Positive │ Wayne Whaley

The Turn Of the Year (TOY) Barometer is based on the S&P's November 19 to January 19 performance. This is the most predictive period of the year, the single most reliable seasonality barometer of forward stock market returns and the kingpin of seasonal barometers. A return during this 2-month period greater than 3%  is a bullish signal, and the market is very likely to do well over the following 12 months. A return of 0-3% is a neutral signal, and results of the current year are expected to be somewhat random. A negative return is a bearish signal for the year, and returns tend to be very poor. 
 

The 2024 TOY is +7.22%. Since 1950 if TOY was > 3%, the next year (January 19 - January 19) had an average gain of +16.5% with two single digit losses (32-2), and February - April was 32-5 for an average 3 month gain of 4.23%.

Tuesday, December 26, 2023

2024 S&P 500 Election Year Seasonal Pattern │ Jeff Hirsch

 2024 is an Election Year and the sitting President is running for office again. 
In this constellation the S&P 500 typically tends to (1.) trend higher from early January into mid February;  
(2.) decline into late March; (3.) rise up for the rest of the year, especially after elections.
Also take note of Larry Williams' re-election pattern.
 
The S&P 500's average annual return during Election Years is 11.6%. Since 1833 the fourth year in the Decennial Pattern has been up 13 vs 6 times down with an average annual return of 5.22%. Over the past 30 years, January gains have occurred 17 times (57%), while losses numbered 13 (43%), barely better than the flip of a coin. In bull markets, New Moons are bottoms, and Full Moons are tops. In bear markets, New Moons are tops, and Full Moons are bottoms. More often than not, stocks will rise from around the 7th to around the 14th calendar day of a month, fall from the 14th to the 20th, and rise from the 20th to the 25th.
 
In 1967 Yale Hirsch published the first Stock Trader’s Almanac and presented the Four Year Presidential Election Cycle as an significant and predictive indicator of stock market performance. The outcomes are relatively steady, regardless of the president’s political leanings in office at the time, and the year after each presidential election marks the start of a new four-year stock market cycle. Considering annual returns of each year in the four year cycle, the Pre-Election Year (2023) is considered best, and  the Election Year second. The most predictive period of the year is November 19th to January 19th. Wayne Whaley coined it a 'Turn of the Year (TOY) Barometer'. If the return of this 2-month period is greater than 3%, a bullish signal is given, and the market is very likely to do well over the following 12 months. If the return is 0-3%, the signal is considered neutral; and if the return is negative, the signal is bearish, and returns very poor. Currently the S&P 500 still trades some 6% above the November 19 level.
 

The 250 year US empire live cycle concluded in 2023. Demise by folly overstretch. Uni-polar global supremacy is over, and Russia, China and Iran stronger than ever. A multi-polar world of worlds now knows how to deal with a paper-tiger gone mad. All star-spangled striped monsters check-mated, defeated and unveiled 24/7 along the many battle fronts on the globe. Project Ukraine lost. Now supervising genocide in Palestine. Yemen's Ansar Allah controls the Bab al-Mandab and launches full front attacks against the hegemon. An emerging Muslim alliance will liberate the Holy Land. Iran may shut down the Gibraltar strait any moment. The Taliban will enter Jerusalem and flatten Tel Aviv. Zionist Saudis and emirs doomed. Revolutionary Shia will root them out. The fever pitch increases. As some discard all this as hysteria and Islamist war propaganda, the dollar hegemony is rapidly melting away under the world island's rising sun. 2024 will be a remarkable 'election year'. W.D. Gann projected 'major panic, breadlines, soup kitchens, despair, and unemployment' into the US of 2024. And US astrologer L. David Linsky sees the home-front ready for more mayhem, upheaval, war and regime change. Plenty of opportunities along the lines and times in the above seasonal roadmap for 2024.
 
 
The Kitchin Cycle and the Benner Cycle are bullish for all of 2024 and 2025 (historically the fifth year outperforming all other years in the decennial pattern). In the current decennial cycle Larry Williams identified June 2024 as "the sweet spot with 90% accuracy" to buy stocks until December 2025.
 
 
 
 
 
In January 2024 the Sensitive Degrees of the Sun are:
Jan 02 (Tue) = Earth at perihelion = positive = high
Jan 06 (Sat) = negative = low
Jan 19 (Fri) = negative = low
Jan 30 (Tue) = positive = high

The Turning points in the Geocentric Bradley Barometer are (+/-1 CD):
Jan 04 (Thu) = Low
Jan 13 (Sat) = High
Jan 22 (Mon) = Low
Jan 29 (Mon) = High

The SoLunar Rhythm during January 2024: 

 
Additional References:
Seth Golden (Dec 26, 2023) @ X
 
 Last time the S&P 500 was up 9 consecutive weeks was in 2004 and before that two 9-week win streaks in 1989 and in 1994,
before that a 12-week win streak in 1985. The next years' returns were:
1986 = 14%
1990 = -4.5%
1995 = 34%
2005 = 3%