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
|
No comments:
Post a Comment