:) VIX Seasonal Low Likely Set, Higher Volatility Expected By Almanac Trader | May 23, 2017
Last Wednesday, May 17, the market was walloped with the worst day of the year thus far. Prior to that day, VIX (CBOE Volatility Index) was at historic lows trading at less than 10 for four straight days and actually closed below 10 on May 8 & 9. VIX then slowly inched higher and closed at 10.65 on May 16. Today, VIX closed at 10.68. VIX and the broader market are essentially right back where they were one week ago, but it took four trading days to (nearly) recover that single day’s loss.
VIX’s 46.4% jump on May 17 could be the first sign that the seasonal low in volatility has already been reached this year. In the following chart, VIX weekly bars appear on top with its 1-year seasonal pattern appearing on the bottom. In a typical year, VIX typically finds a bottom sometime from mid-April to mid-July before briskly rebounding higher through frequently turbulent August and September (since 1950, September is the worst month for S&P 500 and August is second worst based upon average percent change) to a peak in early October. From then until the following April, during the “Best Six Months,” VIX is generally in decline as the market is climbing higher. If VIX has reached its seasonal low for 2017, then more days like last Wednesday could be on their way.
June not such a hot month in post-election years By Almanac Trader | May 26, 2017
The first month of summer has shone brighter on NASDAQ stocks over the last 46 years as a rule ranking sixth with a 0.7% average gain, up 25 of 46 years. This contributes to NASDAQ’s “Best Eight Months” which ends in June. June ranks near the bottom on the Dow Jones Industrials just above September since 1950. S&P 500 performs similarly poorly, ranking tenth.
In post-election years since 1953, June still ranks poorly and its average loss for DJIA and S&P 500 increases to –1.2% and –0.7% respectively compared to –0.3% and –0.03% in all years. DJIA in particular struggles, advancing in just three post-election year Junes (1977, 1985 and 1997). NASDAQ and Russell 2000 fare best in June, posting modest average gains.
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