Showing posts with label Presidential Cycle. Show all posts
Showing posts with label Presidential Cycle. Show all posts

Saturday, July 12, 2025

Seasonal Weakness in US Stocks During July Options Expirations | Jeff Hirsch

Since 1990, the Friday of July’s monthly options expiration week has shown a bearish bias for the DJIA, which declined 21 times in 35 years, with two unchanged years—1991 and 1995. On that Friday, the average loss is 0.36% for the DJIA and 0.35% for the S&P 500.

 DJIA down 21 of 35 years (60%) on July expiration Friday, averaging a 0.36% loss.
 
The NASDAQ has declined in 23 of the past 35 years during this week, with an average loss of 0.46%, including seven consecutive down years most recently. This trend suggests a potential seasonal bearish pattern likely linked to options trading dynamics.

NASDAQ down 23 of 35 years (65%) on July expiration Friday, averaging a 0.46% loss.

For the full week, the DJIA posts the best performance, rising in 21 of 35 years with an average gain of 0.39%. However, the NASDAQ has been the weakest, declining in 21 years—including the last seven consecutively—with an average loss of 0.18%.

S&P 500 down 21 of 35 years (60%) on July expiration Friday, averaging a 0.35% loss.

The week following monthly options expiration also tends to be bearish for the NASDAQ, which averages a loss, compared to mild gains for the DJIA and S&P 500.
 
 

Wednesday, June 25, 2025

July 2025 Post-Election Seasonal Pattern of US Stock Indices | Jeff Hirsch

July begins NASDAQ’s worst four months but is also the seventh best performing NASDAQ month since 1971, posting a 0.9% average gain. Lively trading often accompanies the first full month of summer as the beginning of the second half of the year tends to bring an inflow of new capital.

Typical Post-Election Year July: Early Strength, Beyond Mid-Month Mixed.

This creates a bullish beginning, middle, and a mixed/flat final third. On average, over the last 21 years, nearly all of July’s gains have occurred in the first 13 trading days. Once a bullish day, the last trading day of July has had a modestly bearish bias over the last 21 years. In post-election years since 1950, July has exhibited a similar pattern to the recent 21-year period with some modest weakness just ahead of Independence Day.

 
Data from the Stock Trader’s Almanac are showing that since 1950, July has been the strongest month for both the DJIA and the S&P 500 in post-election years. Specifically, the DJIA has averaged a 2.1% gain, ranking first among months, with 15 positive years and only 3 negative years. The S&P 500 mirrors this, averaging a 2.2% gain, also ranking first, with 12 positive and 6 negative years. 
 
This covers 19 presidential election cycles from 1952 to 2020, providing a robust dataset spanning post-war booms, recessions, and technological shifts. A notable statistic is the 10-year streak of positive July returns for both indices from 2015 to 2024, suggesting a recent intensification of this seasonal pattern. The table below summarizes the performance:  
 

 Post-Election Years with 1st-Term Democrats +14%, 1st-Term Republicans +1%.
 
 
 
% of Months in Which SPY Closed higher Than It Opened From 2015 to 2024
 
 
See also:

Monday, June 2, 2025

June 2025 Post-Election Seasonal Pattern of US Stock Indices | Jeff Hirsch

In post-election years since 1950, early June strength has been notably stronger for NASDAQ and Russell 2000, while DJIA and S&P 500 have typically struggled.  
 
 Typical June Pattern of the S&P 500 in a Post-Election Year:
Early Strength: Starts with a slight uptrend, weaker than NASDAQ (2.5%) or Russell 2000. 
Mid-Month Dip: Drops around days 10-15 due to profit-taking or uncertainty. 
Late-Month Recovery: Rallies late June to a neutral or positive close, less than small-cap/tech gains.
 
So far in June 2025, Russell 2000 ($IWM) has gained 3.8% and NASDAQ ($QQQ) 2.5%, setting the stage for a typical brisk mid-month drop followed by a month-end rally, often led by technology and small caps.

Tuesday, April 1, 2025

April 2025 Seasonal Pattern of US Stock Indices | Jeff Hirsch

The first half of April used to outperform the second half, but since 1994 that has no longer been the case. The effect of April 15 Tax Deadline appears to be diminished with bullish days present throughout April. Traders and investors appear to be more focused on first quarter earnings and guidance throughout the entire month of April.

 Since 1950, April has shown steady market gains from the first trading day to the last, with occasional
minor dips. In post-election years, April starts weaker, but the dip is brief and shallow.

As you can see in the above chart of the recent 21-year market performance in April and post-election years since 1950, April has historically been nearly perfect with gains steadily building from the first trading day to the last with only the occasional and minor blip along the way. In post-election years, April does tend to open on the soft side, but the early dip has historically been shallow and brief.
 

In post-election years, April remains a top performing month ranking second best for DJIA and S&P 500, and third best for NASDAQ. Average gains since 1950 for DJIA and S&P 500 are comparable to all years, but notably improve for NASDAQ, Russell 1000 and Russell 2000. NASDAQ’s three post-election year April declines were in 1973, 1993 and 2005.

 
Other Bullish Scenarios:
 
Rob
ert Miner: Spring Low – Summer High – Fall Low – Bull into Year-End.
 Post-Election Years with 1st-Term Democrats +14%, 1st-Term Republicans +1%

Average move higher: +4.78% (during 18 out of 20 years, up = 90%).

Saturday, March 1, 2025

March 2025 Seasonal Pattern of US Stock Indices | Jeff Hirsch

Rather turbulent in recent years, with wild fluctuations and large gains and losses, March has been experiencing some significant end-of-quarter hits. In post-election years since 1950, March has tended to open strongly, and this strength has generally persisted until shortly after mid-month (as indicated by the dashed arrow below). At that point, the major indexes lost momentum and closed out March with some choppy trading. In contrast, over the past 21 years, March has trended lower through mid-month before rallying in the second half.

 March strong early-month, mid-month losses with choppy trading,
often rally after Quadruple Witching (March 21), likely sharp decline the week after.

March is a particularly busy month. It marks the end of the first quarter, which brings with it quarterly Quadruple Witching (Friday, March 21) and an abundance of portfolio maneuvers from Wall Street. In recent years, March Quad-Witching Weeks have been quite bullish, but the week after has been nearly the exact opposite, with the DJIA down 22 of the last 37 years—and often down sharply.
 

Tuesday, February 4, 2025

The Most Consistent Seasonal Patterns in the S&P 500 | With Statistics

Excluding the specifics of the decennial and presidential cycles, the average annual cycle of the S&P 500 since 2004 reveals five consistent seasonal periods, three of which are suitable for high-probability swing trades (90%+):
 
 S&P 500 average annual cycle (2014-2024).
Since the S&P rises 70% of the time, bearish trends are less consistent than bullish ones.

# 1: Mid-February to Late-March Decline: Price action shows an important top between February 14 and 15, followed by a bearish trend lasting into March 20. 
 
 Bearish from February 14-15 High to March 20 Low (2004-2023).
Average move lower: -2.35% (during 12 out of 20 years, down = 60%).
[ ¡ stats in tab referring to February 15 to March 1 (not March 20) - typo, error ?]

# 2: Late-March Rebound: Over the past 20 years, the S&P 500 has risen 18 times between March 23 and April 27.
 
 Bullish from March 23 Low to April 27 High (2004-2023).
Average move higher: +4.78% (during 18 out of 20 years, up = 90%).

# 3: July Rally: Since 2009, the S&P 500 has always risen between June 27 and July 25. Not most years. Every single year.
 
 Bullish from June 29 Low to July 25 High (2009-2023).
Average move higher: +4.27% (during 15 out of 15 years, up = 100%).
 
# 4: September Chop: Lack of clear bullish or bearish trends; tentatively sideways to down.
 
September chop between September 1 High to September 30 Low (2009-2023).
Average move higher: +2.77%. Average move lower: -2.63% (during 8 out of 15 years, down = 53%).

# 5
: November Rally:  S&P 500 consistently rising since 2004 and averaging a 4.88% gain.

Bullish from October 25 Low to November 30 High (2004-2023)
Average move higher: +4.88% (during 18 out of 20 years, up = 90%).

Reference:
 
 S&P 500 Seasonality (2000-2025).
 
February averaged 0.1% gain over the past 
five decades, with positive results at 56%.
 
Med
ian Monthly Flow into Equity Mutual Funds and ETFs
as a % of total Assets Under Management (1996-January 2025).

Wednesday, January 8, 2025

S&P 500 Post-Election Year Patterns by Political Party | Robert Miner

Since 1949, the typical pattern of a Post-Election Year is generally flat until late March. The second and fourth quarters are notably bullish, while the first and third quarters tend to be less so. A significant correction in the third quarter is usually followed by a bull trend into year-end. Since 1981, the average trend in Post-Election Years has followed a similar structure but with consistently higher returns (average performance of all Post-Election Years since 1949 +8%, since 1981 +15%).
 
Spring Low – Summer High – Fall Low – Bull into Year-End.
 Post-Election Years with 1st-Term Democrats +14%, 1st-Term Republicans +1%.

That said, Post-Election Year returns have historically favored 1st-Term Democrats. Since 1949, there has been only one instance of a loss during a Post-Election Year with a 1st-Term Democrat, while 4 out of 6 1st-Term Republicans saw losses.
 
 Market Action in Post-Election Years under Republicans and Democrats since 1953.
Jeffrey A. Hirsch, January 14, 2025.

Data suggests caution in the third quarter during a 1st-Term Republican administration, and the first quarter is typically the worst-performing. Swing traders should wait for the Spring Low to occur between late March and early April before entering long positions.
Post-Election Years generally show strong second-quarter performance with a consistent bull trend from the Spring Low to the Summer High (which can occur as early as mid-May), with an average return of around 4%. The Summer High period, from June to August, sees positive returns only in about one-third of Post-Election Years. 
 
The third quarter often trends sideways or down into the Fall Low in late September, with an average decline of around 7% from the Summer High. Since 1949, only one Fall Low to Year-End period has resulted in a loss, compared to an average gain of 7.6%. Since 1981, every Post-Election Year has seen positive gains from the Fall Low, making the Fall Low to Year-End rally the most consistent trend. Since 1981, each Post-Election Year has closed above the lows of September, October, and November, even if some years briefly dipped below.