With the start of December just days away, it is worth noting that numerous seasonal factors, most of them positive are at play.
On a seasonal basis, this is a good time of the year in which to embrace exchange traded funds tracking several sectors, including consumer discretionary and industrials. Not to mention, the January Effect, the scenario where small-caps lead January market rallies, has been starting earlier (in December) in recent years. [Prepare for the January Effect With ETFs]
Living in the moment, those that bought stocks on Friday Nov. 22 will be heartened to know that the “three-week stretch beginning the Friday before Thanksgiving and continuing through early December is “one of the strongest seasonal periods of the year,” says Jonathan Krinsky, chief market technician at MKM Partners,” Steven Russolillo of the Wall Street Journal reports.
The S&P 500 has been positive every year since 2003 during this three-year stretch with an average gain of 3.2%, according to the Journal.
Chart Courtesy: MKM Partners via Wall Street Journal
Adding to the near-term bull case for stocks is the fact that the S&P 500 is in the midst of a seven week winning streak. As the chart below indicates, stocks look pretty good soon following winning strengths of that length.