A Seasonal Snapshot of the S&P 500
Although we know market prices always trump seasonality in terms of importance, we shouldn’t completely ignore the significance of historical seasonal trends.
Since 1996, the S&P 500 (SNP:^GSPC) has ended higher during the month of January 55% of the time but with a flat return. This particular January appears to be an obvious divergence from this trend. But looking ahead to February, the chart below shows how the S&P 500 has ended that particular month up 58% of the time. You’ll also notice some seasonal weakness during February because U.S. stocks have posted a modest loss of -0.4%.
Beyond next month, March and April have been extremely bullish based upon recently history.
Seasonality hasn’t been much of an issue over the past year for U.S. stocks (NYSEARCA:IWB). Leveraged long ETFs that double (NYSEARCA:SSO) and triple (NYSEARCA:SPXL) the S&P 500’s daily performance have been star performers. Over the past year, SSO (aims for 2x daily performance to the S&P 500) has jumped +26.49% and SPXL (3x daily to S&P 500) has soared +38.85%. Meanwhile, the unleveraged SPDR S&P 500 ETF (NYSEARCA:SPY) has gained +13.95%.
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