Welcome to the Best 3 Months of the Year!

JC Parets
November 6, 2020

Welcome to the Best 3 month period of the year!

They always make a big fuss about "Sell in May and Go Away", but rarely do you they tell you to "Remember to Buy in November". Or as my friend Jeff Hirsch, of the Stock Trader's Almanac, likes to put it, "Buy in October and Get Yourself Sober".

All these sayings derive from the fact that since 1950, every single dollar made in the Dow Jones Industrial Average has come between the months of November through April. In fact, had you bought the Dow on the first trading day in May every year since 1950 and sold on Halloween, you would actually have negative return (or close to it, anyway. I believe the past couple of years put it in the black).

Now, within the "Best 6 Months" of the year, you have an even sweeter spot: November - January.

The way I see it, if stocks couldn't fall during what is historically the worst time of the year, imagine how they'll do during a time where they're actually supposed to go up!

Here's how stocks did during the "Worst 6 months" of 2020:

I see all the major US Indexes up double digits. I see the Dow Jones Transportation Average up over 37% and the Nasdaq100 up 27%.

Did stocks ignore or respect seasonal trends?

I see stocks ignoring the seasonal weakness, showing buoyancy and a bid during a time that it historically doesn't see a bid.

So again I ask, if stocks couldn't fall during the worst 6 months, how do you think they'll do during the best 3 months?

Well, so far November is following seasonal trends. This is one of the best weeks for stocks that we've seen in a long time.

The Nasdaq100 and Nasdaq Composite just went out at new all-time weekly closing highs. we're getting breadth expansion and participation from new sectors and new countries. We're even getting market-cap rotation.

This is a bull market.

The weight of the evidence continues to suggest that we should be spending our time looking for stocks to buy, not looking for stocks to sell. (Although that $XOM short did work out really well for us).

Premium Members can access our Trade Ideas list here.

Also, some of this week's Premium Reports, in case you missed them:

There's a lot of opportunity out there.

People love distracting themselves with the gossip of they day.

Fortunately for you, we do not!

JC

 

 

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