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.
Large daily moves in both directions of 2-5% and huge intraday swings have taken a toll on markets and psyches. But the February 28 low has held through this week’s wild swings.
According to sector seasonality, there are two sectors that begin their seasonally favorable periods in March: High-Tech and Utilities.
There are 13 sector seasonalities that enter favorable periods in October. some last only a few months, others half the year. Entry levels and expected returns are exposed.
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.
July starts strong, but often finishes weaker. The week after Options Expiration week – this year starting on the 22nd – can be particularly volatile. July ends the NASDAQ’s best eight months, and starts its worst four months . We will provide notification when the NASDAQ sell signal comes.
With the end of Friday’s trading session, we closed out Q2 2019. As we do each quarter, we wanted to take this opportunity to summarize the performance of various asset classes using ETF proxies.