S&P500 Seasonality – Year End Rally Time?

By Callum Thomas

As the seasons change so to do the habits and actions of all things from the smallest critter all the way up to the wall street trader.  We see seasonal tendencies in price movement across a number of different assets, but perhaps the most talked about – or what perhaps should be the most talked about right now – is seasonality in stock prices.

This article reviews the curious tendency for the S&P500 (and the CBOE VIX) to go through a seasonal pattern of price action across the year.  The key point is historically you tend to see a seasonal surge around this time of the year.  Now it’s important to note right at the start that seasonality does not always work… and can break when you need it the most.  But it certainly adds another piece of information to the puzzle, and given the adjustment to valuations and increasingly oversold conditions, it is perhaps a more interesting piece of information than usual…

1. Stockmarket Seasonality: First chart shows the S&P500 against its historical seasonal pattern across the period 1990-2017.  You can see that the correction came perhaps slightly overdue from a seasonal standpoint, but likewise you can see that it’s about this time of the year where things pickup again – strictly going off the historical averages.

Continue reading S&P500 Seasonality – Year End Rally Time?

How Seasonality Has Changed

By Tom McClellan

Annual Seasonal Pattern Now vs Earlier

We all know about the factor of seasonality, and especially about how it is distilled into the bit of TV news wisdom, “Sell In May and go away”.  That phrase has been around for decades, originally supposedly referring to traders in England who would “Sell in May and go away, and come back on St. Leger’s Day”.  This referred to the custom of aristocrats, merchants, and bankers who would skip town and go to the country during the hot months, returning for the St. Leger’s Stakes, a horse race held in mid-September.  Source: Investopedia.

It just happens to be a fun rhyme for the U.S. stock market, minus the St. Leger’s Stakes reference, but only during the past couple of decades.  Years ago, seasonality did not work that way, which is what I explore with this week’s chart.

Continue reading How Seasonality Has Changed

Why Seasonality “May” Be Bullish Today

By Rob Hanna

The 1st trading day of the month is often a bullish day for the market. In the past I have broken down the tendency by month. And since 1987 May has produced the most profits. Below are results for May dating back to 1987. (Note performance is measured on a close to close basis.)


Stats here are strongly lopsided in favor of the bulls. Winning %, win:loss ratio, profit factor, and average trade are all outstanding. Perhaps the saying should be “Sell in May, but not the 1st day!”.

Want research like this delivered directly to your inbox on a timely basis? Sign up for the Quantifiable Edges Email List.