What to buy in the marketâs best three months. [Turn Your Images On] [The Best ETF Trade
to Make This Quarter]( [Turn Your Images On]
[Michael Carr,
Chief Market Technician]( [Earlier this week]( I wrote about and prepared a video about seasonality and the best six months of the stock market. Stocks tend to deliver strong gains in the six months starting November 1. This is a well-known seasonal tendency. Less well-known is the best three months of the market. That’s the last three months of the year. It’s widely known that the fourth quarter is the best quarter of the year. The SPDR S&P 500 ETF (NYSE: SPY) ends the year with a gain 83% of the time. The next best is the second quarter, where the three months (from April to June) have a win rate of 78%. Calendar quarters are an easy way to look at the best three months. A more detailed look measures every three-month period. For example, we look at February through April and March through May. The results of this analysis of SPY from its inception 30 years ago are shown below. [Turn Your Images On] We’re now in the best three months of the year. March to May runs a close second based on returns. But October trades deliver gains 85% of the time compared to March at 75%. This year, the best three months are off to a rough start. Stocks sold off on speculation that the Federal Reserve would raise rates. Or maybe the sell-off was caused by higher oil prices. It could also be related to global events. Analysts blamed all this, and more, for the weakness. However, we did have some good news in the sell-off, and it created a buying opportunity to benefit from the strong seasonal trend. With seasonals pointing to gains, it’s time for us to decide what to buy. --------------------------------------------------------------- [Turn Your Images On](
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Michael Carr
Chief Market Technician, Money & Markets --------------------------------------------------------------- Check Out More From Stock Power Daily: - [A 6-FACTOR BREAKDOWN OF GOOGL’S BULLISH RATINGS]( - [MY 6-PART SYSTEM FOR FINDING THE MARKET’S TOP STOCKS]( - [WHY I JOINED THE MONEY & MARKETS TEAM]( Privacy Policy
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