Everyone is talking about yearend seasonal strength this year, but it’s not news to us. 2019 has been tracking historical seasonal market patterns quite closely this year and that suggests it is likely to continue to track it.
Our good friend Larry McMillan (@optstrategist) trades seasonal yearend strength with the Russell 2000 from the close the day before Thanksgiving through the end of our Santa Claus Rally (the last five trading days of the year and the first two trading days of the New Year).
So here we have run the numbers from 1979 when the Russell index data begins comparing R2K to the DJIA, S&P 500 and NASDAQ. The small-cap index Russell 2000 is the best performer up an average 3.1% (median 3.2%) with an 80% win ratio up 32 of the last 40 years. Last year was the worst and it’s been down 3 of the last 5 years.
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.