Did you know the strongest five days of the year are set to kick off at the end of today? That’s right, buying the close on October 27 and holding the next five full trading days has produced an average return of +1.7%, better than any other five day combination – even stronger than the well-known Santa Claus rally that takes place right after Christmas.
Why is this? Well, the second half of October has some of the single best performing days as well, which helps. In fact, tomorrow (October 28) sports the best average daily return out of any day of the year back to 1950. According to Ryan Detrick, Senior Market Strategist, “Why is late October historically strong? It is the end of the worst six months of the year and we all know that October has also seen some big sell-offs, but nice recoveries late in the month. Specifically, why is October 28 such a strong day? It is probably random, unless you consider the fact this is also my birthday – then maybe we have the real reason.”
Bigger picture, equities have been caught in one of their tightest ranges ever. With the historically best six months of the year nearly upon us, could seasonality be what is needed to break out of this range?
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