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The US Stock Market: What History Tells Us About December

"History may not repeat itself, but it rhymes a lot." Mark Twain

The following chart and text (green font) are excerpts from our 11-page December 3rd Global Seasonal Analysis report.

Global Seasonal Analysis displays monthly, weekly and daily seasonal price trends for 17 different financial assets including global equity prices, global benchmark interest rates, key foreign exchange rates and economically-influential commodity prices -- all based on historical data going back to the 1950s.

excerpt from Global Seasonal Analysis
December 3rd, 2010
Seasonality in Global Equity Prices

In the US S&P 500 Index, the green bar highlights December as the 2nd seasonally strongest month in the US broad market since 1957.

It represents the midpoint of a three-month trend of seasonal strength that extends through January, and which includes
three of the five seasonally strongest months for the SPX during this 52-year period.

S&P 500 Monthly Seasonal Pattern Since 1957

The seasonal trend then makes a sharp one-month bearish reversal in February, which is the 2nd seasonally weakest month during this period.

The height of the green bar indicates that, on average since 1957, the SPX has closed +1.47% higher in December. The red line indicates that the index has closed higher during December 74% of the time during this period -- which happens to be the highest closing percentage during any month.


History does repeat. Seasonality in financial asset prices is a graphic representation of this -- and is just one of many technical tools that can help investors make money.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.