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November Seasonality Trends

November remains one of the better months of the year for many key stock market indexes. It is also the start of the stock market’s bullish six-month period from November to April.


With less than 1.5 months before the end of the year, many indexes have gains, some with sizeable gains for the year. The S&P Index (SPX – 18.20% YTD), Dow Jones Industrial Average (INDU – 5.86%), NYSE Composite Index (NYA – 4.46%), Nasdaq Composite Index (COMPQ – 35.67%), Nasdaq 100 Index (NDX – 45.65%), S&P 400 Mid Cap Index (MID – 4.27%), and S&P 600 Small Cap Index (SML – 0.36%).


Although most indexes are considerably higher, favorable seasonality trends can help to extend the late-October 2023 rally, as November remains one of the top-performing months of the year due to the influx of money, including fourth-quarter cash inflows from professional money managers and institutional investors.


For the SPX Index, November is the second-best month of the year after Jul (2.3%). In the past 20 years, SPX has averaged gains of 2.1% for November and 0.7% for December. The day before and after Thanksgiving also favors the bulls, as SPX is up over 75% of the time. Typically, November is the catalyst that jumps start the best six months of the year for stocks. Investors anticipate this bullish trading phenomenon by increasing their bullish stock positioning into November/December.


Like SPX, the Dow Jones Industrial Average is bullish during November and December. Over the past twenty years, INDU has returned on average gains of 2.3% for November. The seasonality strength continues into December with average gains of 0.8%.

NYA is decisively bullish into the last two months of the year, with average gains of 1.8% (November), and 1.1% (December).


In the past 20 years, the technology-laden COMPQ has had average impressive gains of 2.2% during November and 0.5% during December.


The mega-cap technology-based NDX has similar returns, with gains of 2.2% during November, placing it as the second-best month of the year, just behind July (3.5%). NDX also generated average returns of 0.2% during December.


MID is also noted for strength in the last two months of the year. It is the best month of the year, with average gains of 2.6% during November and 1.1% during December.


Small caps (SML) produced over half of its yearly returns (10.5%) during the last three months, with average gains of 0.6% in October, 2.9% in November, and 1.3% in December.


With most indexes gaining 5.5%-9.5% for November, can this torrid pace be sustained into year-end?


Will the 2023 laggards (NYA, MID, INDU, and SML) catch up to the leaders (SPX, OEX, COMPQ, and NDX)?


Source: Chart courtesy of Stockcharts.com

Source: Chart courtesy of Stockcharts.com

Source: Chart courtesy of Stockcharts.com

Source: Chart courtesy of Stockcharts.com

Source: Chart courtesy of Stockcharts.com

Source: Chart courtesy of Stockcharts.com

Source: Chart courtesy of Stockcharts.com

Source: Chart courtesy of Stockcharts.com

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