Everyone is talking about yearend seasonal strength this year, but it’s not news to us.
2019 has been tracking historical seasonal market patterns quite closely this year and that suggests it is likely to continue to track it.
Our good friend Larry McMillan (@optstrategist) trades seasonal yearend strength with the Russell 2000 from the close the day before Thanksgiving through the end of our Santa Claus Rally (the last five trading days of the year and the first two trading days of the New Year).
So here we have run the numbers from 1979 when the Russell index data begins comparing R2K to the DJIA(NYSEARCA:DIA), S&P 500(NYSEARCA:SPY) and NASDAQ(NYSEARCA:QQQ). The small-cap index Russell 2000(NYSEARCA:IWM) is the best performer up an average 3.1% (median 3.2%) with an 80% win ratio up 32 of the last 40 years. Last year was the worst and it’s been down 3 of the last 5 years.