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Wednesday, July 19, 2017 10:08:39 AM
:::: All-Time Highs Look Out! Lame Summer Rally Foreboding
By Almanac Trader | July 19, 2017
A thousand Dow points ain’t what it used to be. DJIA’s 1000-point gain since the May 17 low amounts to a mere 5%. That’s not that bad all things being equal. But since the March 1 high DJIA is up only 522 points or 2.5%. For the most part, the market has gone virtually nowhere for 5 months. This is not surprising per se considering the big move we the prior 5 months since the election.
In addition to the erratic political arena, high valuations, soft internals and precarious technicals; we are not firmly in the Worst Four Months of the year July-October. It’s usually about now, when trading begins to dry up that we begin to hear talk of the infamous “Summer Rally” featured on page 72 of the Stock Trader’s Almanac 2017. Long story, short, the elusive “Summer Rally” is the weakest seasonal rally of them all.
So we took a look at the current Summer Rally and found it to be rather weak so far, up only 5% from the Spring low on May 17, and that does not portend so well for the Summer and Fall Corrections. We lined up the Summer Rallies ranked from weakest to strongest since 1964. Over the past 53 years prior to this year DJIA has rallied and average of 9.0% from its May/June low until its Q3 high. The Fall Rally averages 11.0% and the Summer and Fall Corrections average a loss of just under 9% for a net average gain of a few percentage points over the summer and fall.
However, as shown in the table below, when the Summer Rally is below the 53-year 9.0% average, the summer and fall correction tend to be bit steeper, -11.0% and -9.9%, respectively. It gets worse as the Summer Rally numbers dwindle. So, if the market does not get excited about something soon, we may be looking at a summer selloff that is a bit deeper than usual.
http://jeffhirsch.tumblr.com/post/163150044843/all-time-highs-look-out-lame-summer-rally
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Click on "In reply to", for Authors past commentaries
By Almanac Trader | July 19, 2017
A thousand Dow points ain’t what it used to be. DJIA’s 1000-point gain since the May 17 low amounts to a mere 5%. That’s not that bad all things being equal. But since the March 1 high DJIA is up only 522 points or 2.5%. For the most part, the market has gone virtually nowhere for 5 months. This is not surprising per se considering the big move we the prior 5 months since the election.
In addition to the erratic political arena, high valuations, soft internals and precarious technicals; we are not firmly in the Worst Four Months of the year July-October. It’s usually about now, when trading begins to dry up that we begin to hear talk of the infamous “Summer Rally” featured on page 72 of the Stock Trader’s Almanac 2017. Long story, short, the elusive “Summer Rally” is the weakest seasonal rally of them all.
So we took a look at the current Summer Rally and found it to be rather weak so far, up only 5% from the Spring low on May 17, and that does not portend so well for the Summer and Fall Corrections. We lined up the Summer Rallies ranked from weakest to strongest since 1964. Over the past 53 years prior to this year DJIA has rallied and average of 9.0% from its May/June low until its Q3 high. The Fall Rally averages 11.0% and the Summer and Fall Corrections average a loss of just under 9% for a net average gain of a few percentage points over the summer and fall.
However, as shown in the table below, when the Summer Rally is below the 53-year 9.0% average, the summer and fall correction tend to be bit steeper, -11.0% and -9.9%, respectively. It gets worse as the Summer Rally numbers dwindle. So, if the market does not get excited about something soon, we may be looking at a summer selloff that is a bit deeper than usual.
http://jeffhirsch.tumblr.com/post/163150044843/all-time-highs-look-out-lame-summer-rally
• DiscoverGold
Click on "In reply to", for Authors past commentaries
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
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