The seasonal patterns in the world’s stock markets are well documented. One of the most famous seasonal patterns is the tendency of the S&P500 to gain over the final quarter of the year between the end of October and into year-end.
Over the last 71 years, the S&P500 has gained 55 times between October 27 and December 31. The average gain has been 3.90%. The largest gain was +15.38% and the largest loss was -12.24%. There is no guarantee that this seasonal pattern will repeat the gain this year. However, it is very helpful to notice when these strong seasonal patterns are in place.
Major Trade Risks: The main risk to this trade is a correction in stocks with many analysts still expecting a deeper correction more generally.