Jul

9

In checking the old saw that a big rise through the first 6 or 9 months of the year is bull for the remainder of the year, I find an inverse relation i.e. the bigger the rise in the first 6 months the more bear it is. Conversely when big declines the first 6 or 9 months it's very bull for the remainder of the year. Of course there have been only 1 or 2 declines in the first 6 months during the last 20 years… would someone check the relation going back 75 or so years. Of course for once, you will probably see % changes rather than algebraic changes.

Jeffrey Hirsch writes: 

I ran the numbers on this for the blog.

Here's the copy. Check the tables on the link.

The market just put on its best first half performance for the Dow since 1999, the S&P 500 since 1997 and NASDAQ since 2003 – and that's a pretty decent omen that market will tack on additional gains. Performance below following first-half Dow and S&P 500 gains greater than 7% and NASDAQ Composite gains greater than 10% shows a solid history of gains for the second half – after a tepid market action in Q3.

Modest gains of about 1% continue into July, but gains little ground during the rest of Q3, which should come as no surprise given the infamous negative history of August and September. On average the market was unable to match first half gains during the second, though the across-the-board 7+% gains over from July to December is still solid. The Dow's second half win ratio following jumbo gains like 2019 is a rather impressive 85.3% – S&P's win ration is 80.0%, NAS 73.9%. Full-year gains are virtual lock.

But The Chair has a point the biggest gains – the handful or so larger than this year had rough second halves.


Comments

Name

Email

Website

Speak your mind

Archives

Resources & Links

Search