Second Halves Following Flat First Halves

After information about the January Barometer was posted, the following article was noticed on Twitter sent by Jeffrey Hirsch from the Stock Trader's Almanac.  Both of these are theories with their respective probabilities of success.  They may work and they may not.  Please, as always, do your own homework and consult with professionals before making any investment decisions.

Tuesday, July 15, 2014

$DJIA $SPX Second Halves Following Flat First Halves
By Christopher Mistal

Despite the continued generosity of the Fed, an improving labor market and generally solid economic and corporate data, stock market performance in 2014 has been rather lackluster. At the midway point this year DJIA was up a mere 1.5% and S&P 500, a little over 6%. On the heels of a record-setting 2013, this is a particularly meager showing for six months. However, this type of first-half performance is not all that uncommon. In 64 years since 1950, DJIA has been flat (defined as down less than 5% or up less than 5%) 20 times. Within these 20 years, S&P 500 was also flat 15 times.

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Following flat first halves, full-month July performance was well above average at 2.1%. In all Julys since 1950, DJIA and S&P 500 averaged gains of 1.2% and 1.0% respectively. However, after July’s surge the market then tended to drift sideways to lower from August through the end of October. At which time a mild fourth quarter rally pulled the market modestly higher.

This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions. 

Past performance is not indicative of future results.