Folks have become fixated with “Sell In May” but forget to “Buy in October, and Get Yourself Sober.” Our Best Six Months MACD Buy Signal that triggered last Friday, October 11th, initially appears to be timely. Friday’s Alert detailed several trades that were deployed Monday and updated in a follow up Alert on Monday. In addition to the Seasonal Sector ETF trades and the Tactical Seasonal Switching Strategy Portfolio trades in DIA, SPY, QQQ and IWM we released a New October Stock Basket yesterday!
As you can see in the chart below of the S&P 500 the MACD “Buy” indicator trigger in the lower pane, highlighted in the yellow box with the black arrow, came in strong below the zero line. In the upper pane resistance at 3010 still persists. Aside from this resistance technically things look encouraging. We held support last August above 2815 and have been making higher lows since then, riding the 200-day moving average higher. The 50-day moving average has also constructively turned higher.
As we have been monitoring all year, seasonal patterns for the Pre-Election remain on track, though the October dip came early. Save some truly negative news, the low for the year is likely in. With the market tracking this seasonal pattern so closely all year that suggests the pattern is likely to continue, which means some backing and filing around S&P 3000 through late November before additional new highs toward yearend.
As always, please use protective buy and sell stops when trading futures and options.
Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.