Markets – Macro – Technicals

Busting a Seasonality Myth

Well there ya go. Stocks made new highs, only took 13 days. Bulls are back all over the airwaves and new high targets are being reeled off again. Even Ralph and Dennis. Oh I do like to make fun of them, but deservedly so, their public calls have  just been dreadful:

The message: Be cautious when listening to anybody about their certitudes. The fact is nothing in this business is for certain and the airwaves and social media are also filled with myths that seem to be self perpetuating. The most current one: Stocks have their best 6 months from November – April. Really? On the surface that seems to be true and now that Ralph and Dennis are all bullish again let’s buy new all time highs right?

Not so fast.

We’ve just had a massive 5 year bull market spurred on by central bankers and their cheap liquidity. November then must a be a great month or so everyone seems to be telling you. Let’s look at the actual facts:

2010:

2010

2011:

2011

2012:

2012

Notice a trend? Even 2013, the super rally year, had a dip in early November. So given this established history is here and now the best place to buy?

2014

Probably not. Does not mean we can’t get performance chasers and BOJ and ECB to push us even higher, but history does suggest a better buying opportunity yet to come…

 

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2 Responses »

  1. I like it.

    Believe the market wants to sell off…………….just waiting on the non-event election to really get going……….the Republican victory is baked in, that’s not a catalyst………….should it go the other way that would be a downside surprise………………..either way it sells off………..IMO

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