November through April is historically the most bullish six-month period for the SPX
Stocks have performed exceptionally well recently. With the S&P 500 Index (SPX) up 22% year-to-date, you might be wondering whether a pullback, or at least a pause, is in order. That scenario does not seem likely, however, according to the seasonality trend. Historically, November through April is the most bullish six-month period for the SPX.
More Bullishness Lies Ahead
The table below summarizes SPX returns over each six-month period going back 50 years. The index has averaged a 6.9% return over the next six months, with 76% of the returns positive. Both of those metrics rank first among all periods.
The following chart shows the path of the index during two periods. The next six months typically see a steady uptrend, while the May through October period chops around the 2% level after the first two and a half months.
What If We Are Already Up Big?
While the May through October period averages a gain of just 1.99% over the past 50 years, the current period is up over 9%. I thought this could be telling us to lower expectations over the subsequent six-month period, but that is not the case. According to the table below, when the prior six-month period adds 5% or more, the next November through April period does even better than usual. Specifically, it averages a gain of 10.8%, with 88% of the returns positive.
Best and Worst Stocks
The last two tables show the best and worst SPX stocks from November through April since 2010. There are nine stocks that have been 100% positive in each of the 12 November through April periods since then. Plus, only two stocks averaged a loss during the time frame: Lumen Technologies (LUMN) and PPL (PPL).
