The NASDAQ’s “Best Eight Months” and Mid-Year Rally have come to an end.
Waiting for the Seasonal sell signal in the NASDAQ, other sector trades come to and end in June. Gearing up for a sideways market is the plan now, until the strong months again come later this year.
Last week, the MACD line on the two of the largest and well followed US Indexes rolled over to sell signals. This ends the bullish 6-month period through April.
After five straight monthly gains, the US stock market finally came under pressure in September. The NASDAQ hit the ‘correction level’ of a 10% slide. Markets have rebounded, but October is usually weak. Patience is needed for entry into the seasonally positive part of the year.
July and the second half of the year have started off consistent with historical trends and patterns. The first trading day was mostly positive with S&P 500 and NASDAQ recording gains. However, July has historically been a month of transition with gains early and weakness in the second half. Meanwhile, three seasonal tredns start in July.
The best six months of the year for certain US stock indexes has ended. A defensive stance is warranted as the summer months arrive.
Usually at this time of the year, early-April, stock markets would have had a nice seasonal rally. Well, there is nothing usual about the market or the economy this time.
As of today, the new bear market closing lows were on March 23. From their highs DJIA was down 37.1% and S&P 500 was down 33.9%.
Since then the market has rebounded to trim those losses.
Now we look to position for the worst months of the year ahead.
The Seasonal Buy Signal is on Hold. The bull market is still in waiting.
Oil prices usually enter a weak period starting in September. Is it playable? Seasonality holds true this year so far. Trades in defensive sectors doing well so far.
The slower moving MACD indicator applied to NASDAQ turned negative. Proceed with caution for the next 4 months.