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Tis The Season For A Strong MarketNovember through April is when the market tends to show its best results. As the saying goes, "sell in May and stay away" until November. Almost all bear markets experienced their lows in October or early November. The three-week period from mid-December to the first week of January is statistically one of the most bullish in the markets each year. Shown below is a chart of the S&P 500 (SPX) for the past 20 years from the first trading day of December through the last trading day of January. 16 out of the past 20 years have shown positive returns with the average return over the 20 data points being positive 2.8%.
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- What's Hot: DELL, DHI November 20, 2009
- Sidewinder: MCD, DKS, JPM November 20, 2009
- Options News: SII November 20, 2009
- Sidewinder: CY, ADSK, KG November 19, 2009
- Options for Dummies November 19, 2009
Looking into June, the market should begin refocusing on upcoming earnings reports for evidence the economy is gaining momentum.
Watching the Treasury's Actions
In the short-term, the government's bond auction is likely to be a key driver of stocks.
Treasury Auction Boosts Market
The Treasury's auction of two-year notes brought an upside surprise which should alleviate fears of a lack of demand for U.S. paper.
Credit Markets Point to Upturn
The credit market, a reliable indicator of equity direction, suggests we will break out of the SPX's trading range to the upside.
The market seems to be saying that a 30% move up from the lows is ahead of the real economy and the market needs to allow the economy to catch up.
