S&P 500 and DJIA enter ‘Worst Months’ of the year period – StockTradersAlmanac

The StockTradersAlmanac, a closely monitored investor newsletter, has officially issued its “Best Six Months MACD Seasonal Sell” signal for both the Dow Jones Industrial Average (DJIA) and the S&P 500, marking the onset of what is traditionally known as the “Worst Six Months” for these indices.

As of Tuesday’s market close, the slower-moving MACD (Moving Average Convergence Divergence) indicators for both the DJIA and the S&P 500 have turned negative, as reported by market analysis firm StockTradersAlmanac. Consequently, the Almanac has issued its Sell Signal for both indices.

Based on historical market analysis, this strategy suggests that it is currently opportune to divest positions in the SPDR® Dow Jones Industrial Average ETF Trust (NYSE:DIA) and SPDR S&P 500 (NYSE:SPY) ETFs. The Almanac plans to close out these positions from the portfolio using their respective average prices on April 3.

However, the strategy recommends retaining positions in the Invesco QQQ Trust (NASDAQ:QQQ) and iShares Russell 2000 (IWM), as the NASDAQ’s “Best Eight Months” period extends until June.

It’s important to note that a sell signal does not imply a complete market exit but rather a strategic reassignment of assets. To facilitate this, the Almanac Investor intends to introduce several low-fee ETF options for reallocating funds from the sold positions, catering to various risk levels and investment objectives. Investors are urged to consider their individual risk tolerance and investment goals when making choices.

Moreover, followers of the Best 6 + 4-Year Cycle switching strategy, outlined in the Stock Trader’s Almanac 2024, are reminded that this seasonal sell signal may not directly apply to them. Nevertheless, it serves as a timely prompt to review existing holdings and adopt a cautious approach.

The issuance of the Sell Signal marks the beginning of tactical adjustments in portfolios, rather than a swift departure from the market, as emphasized by Stock Trader’s Almanac. Portfolio shifts toward a neutral stance will occur between now and the potential triggering of NASDAQ’s Seasonal MACD Sell Signal (earliest on June 3 this year). Positions known to perform well during the “Worst Months” will be retained, alongside those aligned with NASDAQ and Russell 2000 performance.

On Tuesday, the S&P 500 closed 0.7% lower, retreating to the 5,200 level after reaching a new all-time closing high the previous week.