The seasonality of the S&P500 in US mid-term elections has tended to make its biggest gains in the last four months of the year: September, October, November and December (the graph on the left). The upward movement is particularly strong in the quarters of September-November and October-December. Since 1928, the S&P500 has increased in the quarter from September to November in 68.2% of cases (an average of 3.41%), andин October to December index rose 86.4% (6.37% on average) of the time since 1928.
For this year, however, the historical seasonality seems reversed. The weakest historical quarters (April-June, May-July, June-August) this year are the strongest for the index.
Realized gains / losses for each quarter of 2018:
June-August + 2.866%
May-July + 3.57%
April-June + 3.8%
March-May -0.284%
February-April -1.6%
January-March -2.8%
The question is whether the strong upward movement of the index, which is historically seen in the index, will prevail over the reversal of seasonality seen this year?
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