Research Excerpts

History Suggests 2013 Advance May Still Have Legs

Posted on: Friday, November 29th, 2013

The Fed’s 2013 liquidity-driven, road grader version of the US stock market is already up by a whopping 27% as we head into December, almost triple its 9.6% average annual return since 1975, with nary a correction with the exception of a one-month, 7% hiccup during June.

Although many metrics that we track warn of the market’s vulnerability to a potentially sharp pullback between now and the beginning of the new year, seasonality is not one of them.  The following (green highlights) is a brief excerpt and one of 23 charts that appear in our December Global Seasonal Analysis report, one of 8 different reports that we produce for subscribers throughout the month. 


Excerpt From: Global Seasonal Analysis
Asset Class:
US Stock Market
Date: November 29th, 2013

In the US S&P 500 Index (SPX, below), the teal-colored bar in the chart below highlights December as the seasonally strongest month of the year in the US broad market index since 1957.  It represents the second of a six-month period of overall seasonal strength that extends through April, the 2nd strongest month, and includes the five strongest months of the year.

GSA-1

The height of the teal bar indicates that, on average since 1957, the S&P 500 has closed 1.53% higher in December.  The red line shows that, also on average since 1957, the US broad market index has posted a positive December monthly close 75% of the time, which is its highest incidence of a positive close for any month during this 56-year period.

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With the S&P 500 currently bumping up against its next key inflection point (see our November 15th report, SPX Testing Its Next Overhead Obstacle, access requires subscription), December seasonality may become an influential factor as investors decide whether to take their 2013 chips off the table now, or try to capture an even bigger annual gain.

Asbury Research subscribers can view all of our latest research, including today’s entire Global Seasonal Analysis report in its entirety, by visiting our Research Center.