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Friday, October 19, 2018 4:38:31 PM
Only a 1 in 5 Chance S&P 500 Finishes October with a Gain
By: Almanac Trader | October 19, 2018
That is the S&P 500's chances of turning around and finishing this October with a gain. To reach this conclusion, we went into our database and started at 1950 for DJIA and S&P 500 (NASDAQ since 1971) and retrieved all past occurrences where the market’s performance in October was negative on the thirteenth trading day of the month. This worked out to be Wednesday’s close. Prior to this year, DJIA had 28 previous losing starts, S&P 500 had 25 and NASDAQ had 21.
DJIA’s worst performance through the thirteenth trading day in October was in 1987 when it plunged 33%. October 1987 was also worst for S&P 500 and NASDAQ. DJIA’s average loss was 3.9%, excluding this year, S&P 500 4.2% and NASDAQ 4.7%. Historically, recovery from these losses by the end of October did not happen that often. DJIA bounced back just 25% of the time to finish October with a gain, S&P 500 recovered just once out of every five (20%) and NASDAQ recovered only 19% of the time.
However, this plays right into our Seasonal MACD Buy Signal and the “Best Months.” Valuations are coming down and bullish sentiment is softening while economic data is holding up and corporate earnings are forecast to continue to grow solidly. Recent weakness also improves the probability that this “Sweet Spot” go around could see performance approaching, or even besting, historical averages.
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By: Almanac Trader | October 19, 2018
That is the S&P 500's chances of turning around and finishing this October with a gain. To reach this conclusion, we went into our database and started at 1950 for DJIA and S&P 500 (NASDAQ since 1971) and retrieved all past occurrences where the market’s performance in October was negative on the thirteenth trading day of the month. This worked out to be Wednesday’s close. Prior to this year, DJIA had 28 previous losing starts, S&P 500 had 25 and NASDAQ had 21.
DJIA’s worst performance through the thirteenth trading day in October was in 1987 when it plunged 33%. October 1987 was also worst for S&P 500 and NASDAQ. DJIA’s average loss was 3.9%, excluding this year, S&P 500 4.2% and NASDAQ 4.7%. Historically, recovery from these losses by the end of October did not happen that often. DJIA bounced back just 25% of the time to finish October with a gain, S&P 500 recovered just once out of every five (20%) and NASDAQ recovered only 19% of the time.
However, this plays right into our Seasonal MACD Buy Signal and the “Best Months.” Valuations are coming down and bullish sentiment is softening while economic data is holding up and corporate earnings are forecast to continue to grow solidly. Recent weakness also improves the probability that this “Sweet Spot” go around could see performance approaching, or even besting, historical averages.
Read More »»»
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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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