January’s seasonal trading signals can offer a reliable look at the year for stocks and ETFs.
As we enter 2013 and a New Year faces stock and ETF investors, early January is a good time to look at several reliable seasonal indicators for clues about what might lie ahead.
1. The Santa Rally: There are various iterations of “The Santa Rally,” and one of the most common focuses on the Dow’s (nYSEARCA:DIA) performance during the week between Christmas and New Year’s Day. On average, the Dow usually advances just over one percent during that week. The statistics indicate that the Dow has risen during that week approximately 80 percent of the time. If the Santa Rally occurs, during the remaining 51 weeks of the year, the likelihood increases for a bull market in stocks and ETFs for the year. Because the Dow declined just over 0.25 percent during that week this year – whether or not the retreat was a result of anxiety about the fiscal cliff – bearish expectations for 2013 have increased.
2. The Santa Rally from Stock Trader’s Almanac: This version of the Santa Rally is widely viewed as the original trading signal and this one encompasses the last five trading days of the old year and the first trading day of the new year. By this standard, Santa did arrive on schedule as the S&P 500 (NYSEARCA:SPY) gained over this time frame and this bodes for a positive 2013.
Read More
As we enter 2013 and a New Year faces stock and ETF investors, early January is a good time to look at several reliable seasonal indicators for clues about what might lie ahead.
1. The Santa Rally: There are various iterations of “The Santa Rally,” and one of the most common focuses on the Dow’s (nYSEARCA:DIA) performance during the week between Christmas and New Year’s Day. On average, the Dow usually advances just over one percent during that week. The statistics indicate that the Dow has risen during that week approximately 80 percent of the time. If the Santa Rally occurs, during the remaining 51 weeks of the year, the likelihood increases for a bull market in stocks and ETFs for the year. Because the Dow declined just over 0.25 percent during that week this year – whether or not the retreat was a result of anxiety about the fiscal cliff – bearish expectations for 2013 have increased.
2. The Santa Rally from Stock Trader’s Almanac: This version of the Santa Rally is widely viewed as the original trading signal and this one encompasses the last five trading days of the old year and the first trading day of the new year. By this standard, Santa did arrive on schedule as the S&P 500 (NYSEARCA:SPY) gained over this time frame and this bodes for a positive 2013.
Read More