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Stock Market Seasons


The weather on the Stock Market is something like the Irish weather: changeable and unpredictable. However, observed over a period of years, definite seasons are identifiable.

Month
Market Behaviour
Extra
January
Rises strongly
If the market fails to rise in January, it will be a Bear Market this year
February
Stalls or Falls
March of many weathers
Rises to new heights then falls back severely
April
Recovers the heights of March
May
"Sell in May and Go Away"
The founder of the Stock Traders Almanac, Yale Hirsch, discovered 40 years ago that nearly all gains in the market are made between Nov 1 and April 30. Not universally true, it
is true for most stocks most of the time. (Nasdaq shares, however, continue to rise until June).
The effect became exaggerated because of Hirsh’s observation, because lots of stock traders follow his advice. By selling in May, they depress the market.
Hirsch’s almanac predicts whether the market is likely to rise or fall on every day of the year, based on what has happened on each date since 1953.
June
Doldrums
Tentative recoveries after May’s decline, followed by
continuation of the decline.
July
Mid season recovery
A mild recovery in mid July is often followed by a fall back in late July
August – September
Tentative ups and Stronger downs
October
Doldrums
Sometimes falls severely
November
Rises strongly
December
Continues November rise, but relaxes back for
Christmas and New Year break

 

Good Times to Buy:
February, if and when the market has eased back
Late March or Early April, in between the March fall back and the
April rally
Late June and Early July, before the mid season recovery of mid July
Last week of October or early November
 
Good Times to Sell:
Late January or Early February,- after a January rise
Late March: after it has hit the heights, and before it has fallen back
Early in May, after the April rally. In the last few years the May slump has commenced in April – so, consider selling before the end of April
Late July, after the rally and before prices fall back
 

 

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