As I head to Las Vegas for my annual pilgrimage to @MoneyShows TradersEXPO I am both thrilled and shocked to hear everybody on Wall Street and the financial media talking about bullish yearend market seasonality and practically every one of them has used the phrase, “seasonally strong period.”
I’m thrilled because it validates what we already know and what I live and breathe: that there are clear evidence-based results of real, consistent, tradable and investable seasonal market patterns. I am shocked at how late many of them are to the party. We’ve been in bullish Best Six Months mode since our Seasonal MACD Buy Signal on October 11.
Since our October 11 Buy Signal we have tactically maneuvered out of our defensive positions in Bonds, Cyclicals, Utilities and others and into the main U.S. equity index ETFs: (NYSEARCA:DIA), (NYSEARCA:SPY), (NYSEARCA:QQQ) and (NYSEARCA:IWM) and the gamut of seasonally strong growth sectors over three weeks ago. We also put out a brand new Stock Basket of undervalued growth stocks under Wall Street’s radar.
Market seasonality is clearly firing on all pistons as it has been all year, but everyone’s is jumping on the seasonal bandwagon just a two regular seasonal soft patches are about to come around on the calendar. Now that our Bullish Halloween Trading Strategy is complete with some big market gains at the end of October and the beginning of November we are on the lookout for weakness ahead of Thanksgiving.
Next week is two weeks before Thanksgiving and we’ve shown in several recent posts, it is part of the mid-November soft patch. Then stocks usually pick up in anticipation of Thanksgiving and continue to rally through the end of November. After thanksgiving watch out, the first couple weeks of December are notoriously choppy and not especially bullish as tax-loss selling kicks into high gear.
With the market elevated and the news ever changing, stocks will be vulnerable to these perennial weak spots.