May 1, 2010

Seasonality Is Bad For Stocks. Is The Party Over?

We are now entering a seasonally unfavorable 6 month period for the stock market:

"Research published by Yale Hirsch in the Trader’s Almanac shows that the market year is broken into two 6 month seasonality periods. From May 1 through October 31 is seasonally unfavorable, and the market most often finishes lower than it was at the beginning of the period. From November 1 through April 30 is seasonally favorable, and the market most often finishes the period higher." in The Prag Cap

Anyway, while the statistical average results for these two periods are quite compelling, trying to ride the market in real-time in hopes of capturing these results is not always as easy as it sounds.

Related Etf`s: SPDR S&P 500 ETF (Public, NYSE:SPY), ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS)

Also check this article on Stock Market Seasonality

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