*** July's Vital Statsistics Report***
July wins the consolation prize of being the best month of the third quarter for the S&P and Dow. Its modest gains tower over the weak performance of August and September. NASDAQ has lost ground on average since 1971 as Julius Caesar’s namesake month rings in the Worst Four Months of the year. July has been dogged even harder during midterm election years with techs and small caps suffering the brunt of the selling. NASDAQ averages a -3.4% loss and the Russell 2000 a painful -6.2%.
Any positive action tends to be wrapped up by week two as NASDAQ’s 12-Day Mid-Year Rally ends on Friday the 14th. Since 1987 this short run that starts the last few days of June has pushed NASDAQ higher 3.2% on average. Though in 2002, the last midterm year and bear market, the rally did not materialize and NASDAQ dropped -3.5% for the 12 days; and in 2004, during the correction, it fell -4.6%.
Expiration week generally spells trouble for stocks. However, Monday before expiration day the Dow and S&P have been up three years in a row. Stocks have finished July strong, but not if a bear market is underway – and you know how we feel about that.
Please trade carefully.
Those who study market history are bound to profit from it.
Sincerely,
Jeffrey A. Hirsch, Editor & Publisher
