The chart below from Bespoke offers comprehensive look at key ETFs from just about all asset classes.
As is mentioned every year, we've now entered the strongest seasonal window for stocks and it will be interesting to see how the next month and a half unfolds with the December Federal Reserve meeting looming in the background. Speaking of seasonality, we came across a fascinating article this week by Steve Deppe that examined the TOY (Turn of the Year) Barometer that was created by quant analyst, Wayne Whaley. The full article is linked here but essentially Whaley set out to uncover the "King Pin of seasonal barometers" by in his words:
"I implored my computer to take a few seconds to exhaustively study S&P performance over every time period of the year and determine which time frame’s behavior was proprietor of the highest correlation coefficient relative to the following year’s performance.”
His findings were pretty remarkable. Per Deppe:
You can see the full results in the linked article but just for example's sake, Whaley found that since 1950 there have been 33 cases of "bullish" TOY Barometers where the S&P's return from November 19th to January 19th of the following year was 3% or greater. The market went on to have positive gains for the next 12 months in 32 of the 33 years, a 97% success rate. The "neutral" and "bearish" cases revealed equally compelling results. We highly recommend giving it a read and looking into more of Mr. Whaley's work.
Another much talked about issue is the discouraging lack of breadth that's occurred as the market has recovered from the September lows. We've written about it as have many others. Those with a bullish view on this market would like to see more stocks participating in these bounces and less of a need to think up creative acronyms like FANG (facebook, amazon, netflix, google) as a tribute to the market's narrow leadership. Stats like these below speak to that:
A couple good reads from the week that was..
Santa rally anyone?
Can Biotechs help pull the market higher?
"Risk management is boring until it's not"