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 | Jevaunie 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.

When December, January and February are each positive ... | Wayne Whaley

Quoted from:
Wayne Whaley @ Twitter/X - Feb 24, 2024.

S&P 500 Seasonal Pattern for February 2024 | Jeff Hirsch

Typical February Performance: Weakness After Mid-Month Peak - After a strong opening day, strength has tended to fade until around the seventh trading day. From there until around the 12-trading day all five indexes have historically enjoyed gains. But those gains have not held until the end of February with a peak occurring around mid-month. By the end of February, only NASDAQ and Russell 2000 have remained slightly positive while DJIA, S&P 500, and Russell 1000 turn negative.

Reference:
Jeffrey A. Hirsch (Jan 24, 2024) @ X

 

See also:
Jeffrey A. Hirsch  (Dec 26, 2023) - 2024 S&P 500 Election Year Seasonal Pattern.

Larry Williams (Dec 18, 2023) - 2024 US Stock Market Outlook. 

 

2024 Turn Of the Year (TOY) Barometer Very Positive │ Wayne Whaley

The Turn Of the Year (TOY) Barometer is based on the S&P's November 19 to January 19 performance. This is the most predictive period of the year, the single most reliable seasonality barometer of forward stock market returns and the kingpin of seasonal barometers. A return during this 2-month period greater than 3%  is a bullish signal, and the market is very likely to do well over the following 12 months. A return of 0-3% is a neutral signal, and results of the current year are expected to be somewhat random. A negative return is a bearish signal for the year, and returns tend to be very poor. 

 

The 2024 TOY is +7.22%. Since 1950 if TOY was > 3%, the next year (January 19 - January 19) had an average gain of +16.5% with two single digit losses (32-2), and February - April was 32-5 for an average 3 month gain of 4.23%.

Credits:
Wayne Whaley (Jan 19, 2024) - The 2024 TOY Barometer.

See also:
Wayne Whaley (Jan 19, 2024) - The Turn of the Year (TOY) Barometer.

S&P 500 Stats │ Wayne Whaley

Wayne Whaley (Jan 06, 2024) - The S&P broke a 9 week win streak last week. Normally any pullback in a strong advance will scan out as a buy signal. I posted 8 week advances instead of 9, so as to have +10 data points. The TOY Barometer aficionados will argue that the first week of the year is not just any week.

 

 

IsabelNet (Jan 06, 2024) - Historically, 9-week win streaks tend to be bullish for US stocks, with a median 12.4% increase in value seen a year later since 1950, giving investors good reason to expect a positive year in 2024.

 

 

IsabelNet (Jan 05, 2024) - From January to May of an election year, the performance of the S&P 500 index is often lackluster. However, as the year progresses, the market typically improves and delivers robust performance. 

 

IsabelNet (Jan 05, 2024) - Historically, the average annual return of the S&P 500 index tends to experience a substantial decrease during periods when stocks encounter challenges in the month of January.

2024 S&P 500 Election Year Seasonal Pattern │ Jeff Hirsch

 2024 is an Election Year and the sitting President is running for office again. 

In this constellation the S&P 500 typically tends to (1.) trend higher from early January into mid February;  

(2.) decline into late March; (3.) rise up for the rest of the year, especially after elections.

Also take note of Larry Williams' re-election pattern.

 

The S&P 500's average annual return during Election Years is 11.6%. Since 1833 the fourth year in the Decennial Pattern has been up 13 vs 6 times down with an average annual return of 5.22%. Over the past 30 years, January gains have occurred 17 times (57%), while losses numbered 13 (43%), barely better than the flip of a coin. In bull markets, New Moons are bottoms, and Full Moons are tops. In bear markets, New Moons are tops, and Full Moons are bottoms. More often than not, stocks will rise from around the 7th to around the 14th calendar day of a month, fall from the 14th to the 20th, and rise from the 20th to the 25th.

 

In 1967 Yale Hirsch published the first Stock Trader’s Almanac and presented the Four Year Presidential Election Cycle as an significant and predictive indicator of stock market performance. The outcomes are relatively steady, regardless of the president’s political leanings in office at the time, and the year after each presidential election marks the start of a new four-year stock market cycle. Considering annual returns of each year in the four year cycle, the Pre-Election Year (2023) is considered best, and  the Election Year second. The most predictive period of the year is November 19th to January 19th. Wayne Whaley coined it a 'Turn of the Year (TOY) Barometer'. If the return of this 2-month period is greater than 3%, a bullish signal is given, and the market is very likely to do well over the following 12 months. If the return is 0-3%, the signal is considered neutral; and if the return is negative, the signal is bearish, and returns very poor. Currently the S&P 500 still trades some 6% above the November 19 level.

 

The 250 year US empire live cycle concluded in 2023. Demise by folly overstretch. Uni-polar global supremacy is over, and Russia, China and Iran stronger than ever. A multi-polar world of worlds now knows how to deal with a paper-tiger gone mad. All star-spangled striped monsters check-mated, defeated and unveiled 24/7 along the many battle fronts on the globe. Project Ukraine lost. Now supervising genocide in Palestine. Yemen's Ansar Allah controls the Bab al-Mandab and launches full front attacks against the hegemon. An emerging Muslim alliance will liberate the Holy Land. Iran may shut down the Gibraltar strait any moment. The Taliban will enter Jerusalem and flatten Tel Aviv. Zionist Saudis and emirs doomed. Revolutionary Shia will root them out. The fever pitch increases. As some discard all this as hysteria and Islamist war propaganda, the dollar hegemony is rapidly melting away under the world island's rising sun. 2024 will be a remarkable 'election year'. W.D. Gann projected 'major panic, breadlines, soup kitchens, despair, and unemployment' into the US of 2024. And US astrologer L. David Linsky sees the home-front ready for more mayhem, upheaval, war and regime change. Plenty of opportunities along the lines and times in the above seasonal roadmap for 2024.

 

 

The Kitchin Cycle and the Benner Cycle are bullish for all of 2024 and 2025 (historically the fifth year outperforming all other years in the decennial pattern). In the current decennial cycle Larry Williams identified June 2024 as "the sweet spot with 90% accuracy" to buy stocks until December 2025.

 

 

 

 

 

In January 2024 the Sensitive Degrees of the Sun are:

Jan 02 (Tue) = Earth at perihelion = positive = high
Jan 06 (Sat) = negative = low
Jan 19 (Fri) = negative = low
Jan 30 (Tue) = positive = high

The Turning points in the Geocentric Bradley Barometer are (+/-1 CD):

Jan 04 (Thu) = Low
Jan 13 (Sat) = High
Jan 22 (Mon) = Low
Jan 29 (Mon) = High

The SoLunar Rhythm during January 2024: 

 

Additional References:
Seth Golden (Dec 26, 2023) @ X

Dimensional (2023) - Market Returns During Election Years.

IsabelNet (Dec 12, 2023) - S&P 500 Day of Month Seasonality Returns 1928 to present.

 

 Last time the S&P 500 was up 9 consecutive weeks was in 2004 and before that two 9-week win streaks in 1989 and in 1994,

before that a 12-week win streak in 1985. The next years' returns were:
1986 = 14%
1990 = -4.5%
1995 = 34%

2005 = 3%

 

 

The Grinch Barometer | Wayne Whaley

Define the Grinch Barometer as the S&Ps performa over the 3 trading days before and after Xmas (6 days). Stay tuned for Grinch spottings.

 

 

 

Since 1950, a negative Grinch has been followed by a positive January in 16 of those 19 years (average month = +4.3%) and a positive calendar year in 18 of those 19 cases (average year = +19.4%). To the contraire, eleven of the 12 S&P double digit loss years since 1950 followed positive Grinch’s.

 

Quoted from:
Wayne Whaley (Dec 09, 2023) - The Whaley - Grinch Barometer. 

 

On Dec 08 (Fri) the VIX printed a new yearly low at 12.35.

S&P 500 McClellan Summation Index - the long-term version of the McClellan Oscillator  - 

kept steadily rising for six week and closed at 858 last Friday. No reversal.

 

The High Low Logic Index (last Friday = 1.467) indicates no reversal and that the NASDAQ is nowhere near a major top yet. Every major high since 2000 happened only after the logic index had reached 1.92 or higher prior to the top: 2000 = 1.92; 2007 = 2.01; 2015 = 2.18; 2018 = 2.05; 2019 (2020 crash) = 2.17; 2021 = 2.09. 

 

Dow Jones Industrial Average (daily bars)

However, the DJIA now closed the sixth week / the 27th trading day above the 9-day moving average a.k.a. the market maker re-balance level within all different weekly range templates. Not sure when this happened last time. All the shallow consolidations during the past four weeks occurred around the 3-day moving average only. Spectacular. Meanwhile the S&P 500 and the NASDAQ consolidated last week around the 9 DMA into Thursday before taking out the previous weeks high once again - but by some points only. Nasdaq actually printed lower weekly lows and closed on a lower high. What goes up will come down again to 50%+ levels - sooner or later. Next Monday, December 11, the DJIA will open the seventh week / the 28th trading day above the 9 DMA. Impressive outside fourth quarter range on a new 2023 high. The S&P 500 touched the July 27 yearly high to the pip but did not break to the upside. Lagging behind the other two major indexes by at least a single pip. Quite fantastic. Monday, December 10, will be 45 solar longitude degrees away from the November 27 major low. Tuesday, December 12 looks like a New Moon and 'Sensitive Solar Degree' December high. Saturday-Sunday, December 16-17 is a turn day in the geocentric Bradley Siderograph and should mark a low in US stocks. 

The Turn of the Year (TOY) Barometer | Wayne Whaley

Jason Leavitt (Jan 22, 2020) - According to Wayne Whaley, the most predictive period of the year is November 19 to January 19. He considers this period to be the single most reliable seasonality barometer of forward stock market returns – so much so that he’s said if he could only make one trade/year based on one indicator, this is the indicator he’d use. Whaley’s goal was to identify what he called the "kingpin of seasonal barometers." He stated: "I implored my computer to take a few seconds to exhaustively study S&P performance over every time period of the year and determine which time frame’s behavior was proprietor of the highest correlation coefficient relative to the following year’s performance."

 

What he found was there was a high correlation between the S&P 500’s returns between November 19th and the following January 19th and the S&P’s performance the 12 months following January 19. And since the 2-month period straddled the turn of the year and the gift giving season, he called it the TOY Barometer [...] if Nov 19 is on a weekend, use the Monday after the weekend, and if Jan 19 is on a weekend, use the Friday before). He only considered the price-only return (no dividends). If the return during this 2-month period was greater than 3%, a bullish signal was given, and the market was very likely to do well over the following 12 months. If the return was 0-3%, the signal was considered neutral, and results were somewhat random and in line with what is considered average. And if the return was negative, a bearish signal was given, and returns tended to be very poor.

 

Since 1950, there have been 36 bullish signals (including the one that just triggered), 19 neutral signals and 16 bearish signals [as of Jan 22, 2020]. Let’s look at each signal group.

Bullish Signals:    The 35 completed bullish signals have led to gains 33 times the following 12 months. The losses were in 1987, the year of one of the biggest single-day crashes in history, and 2018, that year that included a 20% drop during the fourth quarter. The average and median gains of the 12 months following the bullish signals were 17.7% and 15.1%. This isn’t much better than the “all years” stats, but the win rate (94%) is much higher than the “all years” win rate (73%). 

 

Neutral Signals:    There have been 19 neutral signals. The following year was positive 12 times (63%), compared to 73% win rate for “all years.” The overall average and median returns were 6.0% and 7.1%. But among the “up” years, the average and median gains were 14.4% and 9.4%, while the “down” years’ average and median losses were -8.5% and -7.8%. There were several big up years (1995, 1996, 1998, 2003), and two big down years (1973, 1977), so even if there is a neutral signal, there’s still a decent chance the following 12 months will venture far from its January 19 print.

Bearish Signals:    There have been 16 bearish signals. Only 6 (38%) of the following years posted a gain while 10 posted losses – and 6 of those 10 posted double digit losses. The overall average and median returns were -3.6% and -6.0%. The “up” years posted average and median gains of 14.6% and 15.5%, while the “down” years posted average and median losses of -14.6% and -12.9%. So despite the low win rate, when the market does well, it has the ability to do very well, as was the case this past year.

Summary:     

The bullish years have a very high win rate (94% vs 73% for “all years”). The average gain (17.7%) isn’t much higher than the “all years” gain (16.6%), so a bullish signal increases the odds of an up year but doesn’t increase the gain itself. 

 

The bearish years have a low win rate (38%). The gains during those up years (14.6% vs 16.6% for all years) are very good, but the losses during the down years are noticeably bigger than when a bullish or neutral signal is signaled (-14.6% vs -6.2% for bullish years and vs -8.5% for neutral years). So the odds of a down year are much higher, and the losses that follow are much bigger. 

 

The neutral years are mixed. The win rate is 63% (vs 72% for “all years”), with the gains during up years being pretty good (14.2% vs 16.6% for “all years”) and the losses during down years being moderate (a little worse than bullish years but much better than bearish years).

[...] When a bullish signal is in play, odds heavily favor solid gains over the following 12 months, but when there’s a bearish signal, odds favor a down year with a relatively big loss. But regardless of the signal, “up” years tend to be very good.

Quoted from:

 Jason Leavitt (Jan 22, 2020) - Wayne Whaley’s TOY Barometer.

 

See also: 

G. Wayne Whaley (Aug 31, 2012) - Trade less, earn more with Turn of Year timing model.
Steve Deppe (Nov 19, 2015) - Maximizing Returns With Wayne Whaley’s TOY Barometer.
Steve Deppe (Jan 20, 2016) - Whaley’s “TOY Barometer” Sends Bearish Signal To Investors.
Taylor Dart (Jan 07, 2019) - S&P 500: One Study Worth Paying Attention To.
Seth Golden (Jan 19, 2021) - State of the Market: Historic Data Studies Offer A Guide.

Kora Reddy (Jan 20, 2022) - TOY Barometer for the Sensex.

Bryan Hayes (Jan 31, 2022) - As Goes January, So Goes The Year?
Leavitt Brothers (2022) - Wayne Whaley's TOY Barometer.

 

Update January 20, 2023 by TradeTrekker