January Seasonality

[12squared]

there is usually a market correction in the middle of January (after the initial new deposits have been invested by institutions), and it is most evident in tech stocks.

from https://www.morningstar.com/news/market ... sh-stretch
McMillan's system buys Puts for QQQ for 2 Feb on the 8th & 12th trading days of January
This is consistent with many Seasonal Strategies which switch from bonds to stocks around the 10th TD.

McMillan also mentions that the January seasonal trade begins on the 18th day, Friday, Jan. 26 2024. Many strats go from G to S on that TD.

[Bubba]

There are more January "effects" to consider. This one from Wayne Whaley is pretty popular with people into seasonality https://twitter.com/WayneWhaley1136/sta ... 1332215015. Hint...it's got one out of the 3 that's pretty decent. Wayne also claims that we're in a period comparable to the mid 60s...but we'll see how that goes. Good luck to all!

[mjedlin66]

McMillan's system buys Puts for 2 Feb on the 8th & 12th trading days of January
This is consistent with many Seasonal Strategies which switch from bonds to stocks around the 10th TD.

Wouldn't that be the opposite?
Buying puts on sale right before the expected stock price decline is bearish.
Bonds->stocks is bullish by contrast.

[12squared]

McMillan's system buys Puts for 2 Feb on the 8th & 12th trading days of January
This is consistent with many Seasonal Strategies which switch from bonds to stocks around the 10th TD.

Wouldn't that be the opposite?
Buying puts on sale right before the expected stock price decline is bearish.
Bonds->stocks is bullish by contrast.

You are correct.

In a 2010 article, McMillan explains that "the NASDAQ-100 usually falls from about the 8th trading day of January to the 18th trading day." Hence Puts for QQQ.

[12squared]

End of January seasonal trade:

Mutual funds and other institutions often receive an inflow of cash just as a new year begins. They invest some of that cash immediately, which is why the market often rallies in the first few trading days of January. However, to some extent, they approach the end of the month with part of that cash still sitting on the books. They do not normally want to show an overly large cash balance at the end of the month, so they invest the rest of the available cash near the end of January.

Historically, prices tend to rally beginning at the close of the 18th trading day of January and continuing for four days. In the past 38 years, this system has produced 30 winners and eight losers, when measured in terms of S&P 500 prices. The average gain is 1.1% for the four days

from
https://www.marketwatch.com/story/this- ... =home-page
https://www.morningstar.com/news/market ... t-38-years

[jbt6598]

The January effect has a hit rate of approx. 70-80 percent. Markets sometimes change their structure, so it is better to do your seasonal analysis.
Here is the seasonality of February and March for the major indices.