The Status of the TOY Barometer at the End of November | Wayne Whaley

The way equity markets move from one year to the next often provides insight into what to expect in the following year. One of my favorite Turn of the Year (TOY) barometers is Toy2mt, which tracks the S&P 500's performance over the two months from November 19 to January 19. Historically, when the S&P shows a gain of 3% or more during this period, it has performed very well over the following 12 months (36-2 record, with an average return of 16.6%). I have found that the November component of Toy2mt (November 19-30) serves as an early indicator of what may lie ahead for Toy2mt and the year to come.

As of November 30, six of the first seven Toy2mt days were positive, and the November segment of Toy2mt stands at +1.98%, with bulls targeting a +3% Toy2mt return. Below is the performance for the following 12 months (December-November) since 1950, based on three different levels of the November 19-30 segment of Toy2mt.

 

» If I could make only one trade per year based on one indicator, it would be Toy2mt. «

[HERE], and [HERE]

When the November 19-30 period registers +1.5% or higher, it has typically been a positive signal for the following 12 months (December-November). In 2024, the November 19-30 period came in at +1.98%. It’s still early, and we will learn much more over the next seven weeks.

Wayne Whaley, November 30, 2024.

20-Year High in Insider Selling Precedes Market Top | Adam Taggart

Insider selling is often early.

The highest bars in the chart above (ratio of sellers to buyers) seem to come before the final major price tops in the S&P 500. The ratio of insider selling to buying is now at a 20+ year high:

 

1. Stocks are at an all-time high.
2. Corporate executives are selling far more stock than they are buying.
3. It doesn't take a genius to see that the insiders are cashing out while the getting is good,

     leaving everyone else to be the patsy when the rug pull arrives.

Adam Taggart, November 27, 2024. 

Scott Rubner: 4% year-end rally to 6,200 in the S&P 500, and 7,000 not long after.
Bloomberg, November 25, 2024.

 

Over the past 50 years, the Nasdaq has only experienced one instance (2011) where it was negative both on the Wednesday before and the Friday after Thanksgiving. Out of the 9 negative Wednesdays recorded during this period, the Nasdaq posted a positive return on 8 Fridays after Thanksgiving, with an average Friday gain of 1.39% and a median gain of 0.83%.

Wayne Whaley, November 27, 2024.

 

Jeffrey A. Hirsch, November 28, 2024.

S&P Performance After Back-to-Back Double-Digit Years │ Wayne Whaley

The S&P was up 24.23% in 2023 and, as of October 19th, is up 22.95% in 2024. Barring a 10% correction in the last two months of this year, the S&P is positioned to post back-to-back double-digit years for the 25th time since 1930, which is the starting point of my S&P database.

 

Since 1930, the S&P has had 65 winning years out of 95 (68.4%), with an average annual gain of 7.9%. After back-to-back double-digit years, it has recorded 13 wins and 11 losses, with an average annual gain of 2.9%. Notably, since 1950, January results have been 7-12, with the last four being negative. The nine prior cases highlighted in yellow represent post-election years, where the S&P was 4-5, with an average gain of 1.5%.

There have been three occasions of at least four consecutive double-digit years: 1942-1945, 1949-1952, and five consecutive years during the early phase of the technology revolution from 1995-1999. This does not include the eight consecutive positive years in the 1980s, of which six were double-digit gains. Therefore, there is precedent for the rally to continue, especially if one believes we are in the second chapter of the technology revolution, driven by advances in AI.

Wayne Whaley — October 19, 2024.  

October 27: Key Date for the Year-End Rally | Wayne Whaley

We examined the S&P's performance during the first nine months of 2024. The index finished September with an impressive 20.8% increase, having only faced one losing month in April, which saw a decline of 4.2%. Notably, all seven rolling quarters during this period were positive, comprising the months from January to March, February to April, and so on. This remarkable performance places 2024 among only 15 years since 1930 that experienced both a gain of over 10% in the first nine months and no negative rolling quarter within that same timeframe. It's significant to note that all instances occurred after 1950.

A closer look at the historical data from the previous 14 cases reveals a pattern: while there tends to be some weakness in the second week of October, this is often followed by an "End of Year" rally starting around October 27. In fact, 13 out of the 14 instances recorded were positive from that date through the end of the year, with only a minor fractional loss occurring in 1964. Worth noting, four of the last five years have also seen positive performances during the period from October 7 to 15.

Wayne Whaley — October 6, 2024.

When the SPX is up through 3Q in an election year, 4Q is up 89% of the time 

w/avg return of 4.98% (4.26% median), which equates to SPX 6,000 into yearend.

See also:

 Jeffrey A. Hirsch (October 1, 2024) - October Volatility After Big Gain First Three Quarters.

S&P 500 seasonal pattern for October of the election year 2024 in line with the decennial cycle — September 29, 2024.

Stephen Suttmeier (July 1, 2024) - S&P 500 seasonality: first ten sessions and last ten sessions of the month since 1928.

Jack Gillen (2009) - Year-End Rally, January Influence & Trend for the Year.

The S&P 500 After the Current Six-Month Pattern | Wayne Whaley

If the S&P doesn’t lose 1.6% on Monday, it will mark the fifth consecutive positive month, following the 4.2% loss in April.

Since 1950, this six-month pattern of one decline followed by five consecutive increases (Down-Up-Up-Up-Up-Up) has occurred 29 times. In 27 of those instances, the S&P was higher 12 months later, with an average gain of 12.8%.

Wayne Whaley — September 29, 2024

Ryan Detrick — September, 2024.

 Ned Davis — September 30, 2024.

Hurst Cycle Analysis for the S&P 500 and NASDAQ: An 80-day cycle low is expected to form in mid-October 

— David Hickson, September 30, 2024.

S&P 500 in Q4 After New 12-Month High in September | Wayne Whaley

On Thursday, September 19, the S&P 500 closed at a new twelve-month high as well as an all-time high. Since 1950, there have been twenty-nine years in which a twelve-month high was set in September.

In those twenty-nine prior cases, the fourth quarter was twenty-four wins and five losses, resulting in an average quarterly gain of 4.17 percent. The weakest period in the fourth quarter, on average, was from October 20 to 27, during which that week experienced twelve one-percent losses and only two gains of over one percent.

 

The sweet spot was from October 27 to December 5, which recorded twenty-five wins and four losses, with three percent moves being fifteen wins and zero losses. The last twenty instances, dating back to 1967, have followed this pattern.

 

Reference:

Wayne Whaley (September 21, 2024) - A New Twelve-Month High in September.

 

 

 

 

William J. O’Neil's Cup & Handle continuation pattern.

See also:

Wayne Whaley (September 14, 2024) - September 19-26 Weakest Seasonal S&P Week of the Year.   

Wayne Whaley (August 31, 2024) - S&P 500 Soared 7% in Summer, Shifts Weakness to October. 

Jeffrey A. Hirsch (September 17, 2024) - September Quarterly Options Expiration Week Dodgy, Week After Dreadful. 

Jeffrey A. Hirsch (September 5, 2024) - S&P 500 September 2024 Seasonality.

September 19-26 Weakest Seasonal S&P Week of the Year | Wayne Whaley

The weekly performance measure used for comparison is an average of the weeks of interest over the last 50 years, which,

1. Underweights outliers that can distort averages and overweights the observations congregating more toward

     the median and,
2. Weights the most recent years 2 to 1 vs those 50 years prior. 

 

 Wayne Whaley @ X — September 14, 2024.

 

See also:

Wayne Whaley (August 31, 2024) - S&P 500 Soared 7% in Summer, Shifts Weakness to October.  

Jeffrey A. Hirsch (September 5, 2024) - S&P 500 September 2024 Seasonality.

S&P 500 Soared 7% in Summer, Shifts Weakness to October | Wayne Whaley

For this study, summer is defined as the three months from June to August. Historically, the S&P 500 index tends to show modest performance during the summer, with an average gain of 1.43% since 1950 over these three months. In 2024, however, the S&P 500 achieved an impressive 7.03% gain during the summer, with individual gains of 3.5% in June, 1.1% in July, and 2.3% in August.

 

The weakest seasonal period of the year historically occurs in the second half of September. However, strong summers often push much of the traditional September weakness into October, specifically from October 18th to October 28th. During this period in the years with a summer gain of over 5%, the S&P 500 has averaged a loss of 2.53%, with a performance record of 4 gains and 19 losses.

This period is followed by one of the strongest periods of the year, from October 28th to November 5th. In years with a summer gain of over 5%, this timeframe has averaged a gain of 2.61%, with a performance record of 21 gains and 1 loss.

Reference:
Wayne Whaley (August 31, 2024) - Five Percent Summers. 

 

4-Year Presidential Election Cycle 1949-2020 vs 2021-2024

— Jeff Hirsch, August 19, 2024

After +10% January-July and a Negative First Half of August | Wayne Whaley

The S&P was up 15.8% in the first 7 months (January-July) of 2024 and, as of August 11, is down 3.2% in August. The S&P has a history of going counter trend in August with early August weakness after a strong year tending to strengthen the case for a bullish finish. For example, since 1950, there have been 16 years in which a double digit, first seven months of the year (January-July) was followed by a negative first two weeks of August.

The following August 14-January time frame was 14-2 in this setup for an average 5 1/2 months gain of 9.34%. The 5% moves were 12-0 to the positive with the worst drawdown as measured from August 14 of the single digit variety.

The weakest period, on average, was September 23-October 2 which was 6-10 for an average loss of 0.90%. The strongest time frame was October 27-January 20 which was positive in all 16 of those setups for an average, 8 week, gain of 7.27%.

Quoted from:
Wayne Whaley (August 10, 2024) - When a negative 1st two weeks of August is preceded by a +10% January-July.

» After an early August selloff, the market has tended to spend the balance of August bouncing 

around on average with little meaningful progress. The tightening of the presidential election and 

elevated geopolitical tensions are likely to keep a lid on markets through the rest of the “Worst Months“. «

 

 Jeffrey A. Hirsch @ Twitter/X - Feb 28, 2024

Next weekly directional change during week of August 26.

 

See also:
Jeffrey A. Hirsch (August 07, 2024) - No Escaping Historically Miserable August.
TPR (July 25, 2024) - Cosmic Cluster Days | August 2024.
Martin Armstrong (July 14, 2024) - Panic Cycles Week July 15 - 19 & Week September 9 - 13.

Sergey Tarassov (June 26, 2024) - 2024 DJIA vs 40 & 42 Month Cycles.

The Summer Rally | Wayne Whaley

This study looks at the S&P performance from June19 - July23 in those 29 years of the last 40 in which the trailing Quarter, March19 - June19 was positive. As of June 15, the March19 - June19 time frame, with three trading days remaining, is up 4.89% for 2024. The June19 - July23 reaction period will be split into two measures which have distinctly different characteristics, namely June19 - 27 and June27 - July23. 

 

• The June 19 - 27 period which is strongly correlated to the June Post Opex week has been negative in this setup in 17 of the last 19 years.
• The last 14 cases has seen June27 - July23 positive, as well as 25 of the last 29 cases, the so called summer rally time frame you have heard speak of.

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

During June the S&P 500 tends to be true to the trend | Wayne Whaley

The S&P has a well deserved reputation for being flat as a pancake in the summer with June no exception, coming in at 31-19 over the last 50 years for a pedestrian type, 0.52% average monthly gain.  However, if the market is behaving well, the month of June has tended to follow suit. Below, I took the last 50 yrs and split them into 3 categories comprised of years where

1. January - May was negative
2. January - May was 0-8% and
3. January - May was greater then 8%.

In those 35 years in which the S&P was positive for the 1st five months of the year, the month of June was 27-8 with the 3% June moves, 12-1 in the positive direction as opposed to a 4-11 June record in those years where the 1st five months of the year were negative with the 3% June moves 1-4.

In particular, the +8% January-May starts saw June averaging a 2.34% gain. As of Tuesday's close, May 28, the S&P is up 11.24% for the first five months of 2024.

Quoted from:
Wayne Whaley (May 28, 2024) - June tends to be true to the trend.

See also:
Wayne Whaley (May 26, 2024) - Top Ten S&P 500 Seasonal Periods after a +5% January-May.

 

Top Ten S&P 500 Seasonal Periods after a +5% January-May | Wayne Whaley

With four trading days remaining in the month of May, the first five S&P months (January-May) of the year are up 11.2%.  Over the last 50 years, there have been 22 years in which the S&P was up at least 5% for the first five months of the year. Below are the ten strongest seasonal periods in the last seven months of those 22 years, eight of which had a positive slant.

The first column is the performance in the first five months of the year in those 22 years of the last 50 which had a +5% gain.  The 2nd column is the performance from May31-June 8th which is the rated the 10th strongest seasonal period of those last seven months. Then Jun12-July14, etc.

 

In my opinion, the major take away from this scan is that not only are you promised a strong fourth Quarter culminating in a 20-2, Dec14-30 performance but you usually get an equally impressive summer rally from mid June through mid July.  The two soft spots occurred in July26-August10 and Sept23-30.

Wayne Whaley @ X - May 25, 2024

 

A New High in May - Makes the Fall Rally a Strong Play | Wayne Whaley

On Wednesday, May 15, 2024, the S&P closed at 5308.15 which was a new All Time High.  Given that 50% type Bear Markets can take years to erase, I often fancy '12 Month High' as to 'All Time High' scans as they capture the same market characteristics while providing a larger sample size.

Since 1950, there have been 27 prior years of those 74 in which a High for the rolling year was set in May. In those 27 cases, the following June-December performance was 23-4 for an avg 7.58%, seven month gain. The 10% moves during the final seven months of those 27 calendar years were 12-0 to the positive side.  

The fall rally I reference is Aug25-Dec8 with 26 wins after a May High vs on fractional loss.  The scan deemed June21-July01 as the weakest period with a 12-14 mark for a modest 0.26% avg loss.

 

Wayne Whaley - May 18, 2024

 

See also:
Robert Miner (April 26, 2024) - The S&P 500 and the Election Year Cycle.

S&P 500 March-April 2024 Seasonality │ Jeff Hirsch & Wayne Whaley

After 5 months of solid gains, are markets ready for a pause? Bullish Presidential Cycle Sitting President Pattern flattens out the mid-February to late-March seasonal retreat considerably without 2020 in the average.

 'Best Six Months' ends in April.

April is the final month of the “Best Six Months” for DJIA and the S&P 500. From our Seasonal MACD Buy Signal on October 9, 2023, through (March 21, 2024), DJIA is up 18.4% and S&P 500 is up 20.9%. Fueled by interest rate cut expectations and AI speculation, these gains are approximately double the historical average already and could continue to increase before the “Best Months” come to an end.

This AI-fueled bull market has enjoyed solid gains since last October and will likely continue to push higher in the near-term, but momentum does appear to be waning with the pace of gains slowing. With April and the end of DJIA’s and S&P 500’s “Best Six Months” quickly approaching we are going to begin shifting to a more cautious stance. We maintain our bullish stance for 2024, but that does not preclude the possibility of some weakness during spring and summer.

 

Reference:
Jeffrey A. Hirsch (Mar 24, 2024) @ Twitter/X 

 

 

Reference:

 ICT Seasonality | Michael J. Huddleston

The Quarterly Theory | Daye

 

THE CORRELATION MODEL SEES A NEGATIVE LAST WEEK OF MARCH FOR THE S&P. Provided a time frame of interest, my correlation model calculates the Correlation Coefficients (-1 to +1) for the past performance of 4165 different time frames over the prior 3 months vs the performance for the time frame of interest in search of the period which has demonstrated the most barometric acumen in predicting the performance of the upcoming time frame of interest. 

 

This week I ask the model for it’s prognosis for the S&P in the last week of March. It responded that the prior ten calendar days (Mar10-24) had a very uncanny track record of forecasting the last week of March with those 2 time frames having a very strong NEGATIVE correlation which doesn’t bode well for next week given that March 10-24 was up 1.63% this year.  

 

Note the 3-10, March 24-31 performance in the far right category below in those 13 prior years where March 10-24 was greater than 1.2% for an avg wkly loss of 0.74% with 1% moves 1-7 to the downside.  This contrasts dramatically to the 11-2 performance when March 10-24 was less than -0.5%.  Fingers crossed that it is wrong this year. 

 

The outlook for April is much brighter. 

 

  

Reference: 

 Wayne Whaley (Mar 23, 2024) @ Twitter/X

 

[ oftentimes true: ]

 

In Bull Markets, New Moons are Bottoms, and Full Moons are Tops. 

In Bear Markets, New Moons are Tops, and Full Moons are Bottoms.

 

The SoLunar Rhythm in March 2024.

 

 

 

 

 

S&P 500 vs VIX and Seasonal Patterns

Corrections and short-term market peaks often coincide with exceptionally low levels of market volatility.

Reference: ISABELNET - Feb 28, 2024.

 

Beware of the Ides of March: This year also coincides with the seasonal decline during presidential election years where the sitting president is running. Support levels to watch in the S&P 500: 4800 old ATH and 4600 near summer 2023 highs.

 

 Reference: Jeffrey A. Hirsch @ Twitter/X - Feb 28, 2024

February’s last trading day historically bearish. DJIA and S&P 500 have been down 9 straight and 11 of the last 12. NASDAQ has tried to buck the trend, up 3 of last 4 years. Potential setup for historically bullish first trading day of March.

Reference: Jeffrey A. Hirsch @ Twitter/X - Feb 28, 2024

 

 Reference: Wayne Whaley @ Twitter/X - Feb 29, 2024

 

Reference: Larry Williams' 2024 US Stock Market Outlook.