Things may not be looking so good right now, but there’s still hope for the near future. Why? Well, a negative return for the S&P 500 Index from Halloween to Thanksgiving usually signals strong performance for the remainder of the year.
From 1950 to 2011, there were 21 instances in which the S&P 500 produced a negative return from the end of October through the Wednesday before Thanksgiving. On 17 of those occasions, the market registered a gain the rest of the way. The Thanksgiving to New Year’s rally resulted in a 2.68% return for the index on average — well above what could be expected in a typical month. On the occasions in which stocks failed to rally, the downturns were fairly benign.