Ride These 20 Stocks Through the Most Bullish Period of the Year

The next six months are typically bullish for the stock market

Senior Quantitative Analyst
Nov 8, 2017 at 7:00 AM
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Stocks have performed exceptionally well recently, with the major market indexes hitting record highs. The S&P 500 Index (SPX) has gained 15% on the year thus far. You might think a pullback or at least a pause is in order. Well, not according to the seasonality trend. Historically, November through April is the most bullish six-month period of the year for the stock market.

The Next Six Months

The table below shows the performance over the past 50 years of the S&P 500 Index from May through October vs. November through April. It’s not even close. The November-to-April performance is better by every metric below.

spx november through april

This chart shows the path of the index during the two periods. The next six months typically see a steady uptrend. The May-through-October period chops around the 1% level for most of the time.

S&P returns six month periods

When the Previous Six-Month Period is Already Up Big

The previous six months average a gain of just 1.29%, but the recent six-month period gained 8%. Do these unusual bullish returns from May through October lead to unusual bearish returns from November through April? According to the table below, that’s not the case at all. When the prior six-month period gains 5% or more, the next November-through-April period does better than usual. It averages a gain of 9.46%, with 87% of the returns positive.

SPX returns breakdown Nov-April

Individual Stocks

Finally, below are a couple tables showing individual stocks that have big discrepancies between their May-through-October returns and their November-through-April returns. I looked at S&P 500 stocks since 2010. The first table shows the 20 stocks that have performed best from November through April compared to how they performed from May through October. The second table below are those stocks that performed the worst.

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