What to Expect From the S&P 500 This Season

Plus, a list of the best and worst stocks to own from November through April

Senior Quantitative Analyst
Oct 27, 2021 at 8:00 AM
facebook twitter linkedin

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.

IOTW 1026 1

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.

IOTW 1026 2

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. 

IOTW 1026 3

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).

IOTW 1026 4

IOTW 1026 5


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners