The end of October is nigh. Here’s a quick look at how the U.S. market has performed historically in November.
First the (misleading) numbers…
From this 30,000 foot view, November has performed more or less in line with all other months over the last 80 years.
But averages can be misleading because they say nothing about how consistent an observation has been or whether it’s waxing or waning, so below I’ve assumed a trader was only long the S&P 500 in November (red) versus the average month (grey) each year since 1930.
Note the run of losing Novembers prior to 1948.
This clearly skewed our stats (despite not being as applicable in today’s market), so in the graph and stats below I’ve drilled down on November’s performance from 1949 onwards.
Since 1949, November has outperformed the broader market in every decade, and on average, has turned in about twice the return as the average month.
Like all seasonality plays, this one has by no means been a sure thing and doesn’t by itself justify a trade, but I think that there’s clearly been a positive edge to the month so I’m calling the calendar month bias for November BULLISH.
See our monthly seasonality map for daily seasonality predictions in November.
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Filed under: Time-based | 4 Comments