Stock Market Seasonal Trend Analysis

Stock-Markets / Stock Market 2023 Nov 02, 2023 - 09:41 PM GMT

The seasonal pattern suggested that after a pause in Feb the stock market should trend higher into early May for a weak May before correcting into late June follower by a strong July rally into Mid August before ending flat on the month, then followed by a weak September likely into early October that resolves in a rally into late December.

So how have things actually panned out?

Strong January - check

Weak Feb - check

Strong March - check, yes the low came in March but the ended strongly higher.

Strong April - check

Flat May - check

Down June - FAIL - June was one of the strongest months of the year which caught many off guard.

Strong July - Check

Flat August - FAIL - August ended DOWN 1.8%.

So out of 8 months 6 checks and 2 fails for a 75% hit rate, which is pretty good for ONE tool! The various time frames also give insight into probabilities, for instance both June and August showed variability and thus one would not take the seasonal pattern too literally for these months. Whereas there is little variability for September, October and November, whilst variability for December implies the month could turn out to be much weaker than most will be expecting going into December and stocks could even end down on the month!

As for 2024, a weak December would set the scene for a strong January but I am starting to go a little off script here as the focus of this analysis is September and October and not 2024..

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S&P

Targeting 4600 Mid Summer 2023 Top followed by correction to below 4150 into October 2023.

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By Nadeem Walayat

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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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