Are We Due For A Little Mean Reversion? | Jeff Hirsch

I remain bullish on 2024. My 2024 Annual Forecast released on December 21, 2023 is on track, yet the market has already achieved (and slightly surpassed) my Base Case Scenario of average election year gains of 8-15%. While my Best Case Scenario of 15-25% is likely now in play with the market running well above any of the historical seasonal patterns I can concoct, the market may be due for a little reversion to the mean.

The charts here illustrate the three most relevant seasonal patterns: All Election Years, election years with a Sitting President Running for reelection and my STA Aggregate Cycle, which is a combo of all years, election years and the 4^th year of the decade (years ending in 4). The Midyear Rally I discussed early this week is still in play. But after that around mid-July, I would not be surprised if the market were to pull back toward the mean a bit, maybe 5-8%.

There is plenty on the near-term horizon to spook traders from election campaign and political missteps, to Fedspeak, economic data disappointments and just plain old Summer Doldrums. 

Quoted from:

Jeffrey A. Hirsch (June 26, 2024) -  Are We Due For A Little Mean Reversion?

 

See also:

Jeffrey A. Hirsch (June 24, 2024) - Nasdaq’s Midyear Rally from around June 26 to July 12.

 Sergey Tarassov (Jun 25, 2024) - DJIA Longterm Forecast Review. 

Allen Reminick (June 25, 2024) - High in US-Stocks July 3-5 and Pullback into July 14-26.

Wayne Whaley (June 17, 2024) - The Summer Rally.

Tom McClellan (March 29, 2024) - Crude Oil's 10-Year Leading Indication for US Stock Market.

Robert C. Miner (January 31, 2024) - The S&P 500 and the Election Year Cycle.