Q&A & an tSionna Banded Together!

Two charts that reference the statistical period of weakness that we typically experience between April and sometime in the fall {Say mid-August to mid-October}.  There is no hard and fast rule when this period begins and when it ends.  Nor do we mean by statistical weakness that stocks must go down.  I think a better way to understand this period is to say that this seasonal period is a time when equities tend to struggle.  Often stocks will simply be mired in a trading range.  Stocks usually have one rally between Memorial Day and sometime after the 4th of July before finally settling into the summer doldrums.

Now there is no law that says this pattern has to hold.  In fact we highlight in the monthly chart above the years when this has not worked.  But this pattern can be verified by looking at chart patterns going back since the 1920's and therefore we have to use it in our probability calculations about market activity in the coming months.  Probability indicates that there will be one very good buying opportunity in the weeks and months ahead.  We also discussed a few days ago here why we think these patterns occur and work.

*Long ETFs related to the S&P 500 in client and personal accounts.