June and summer are historically weak months for the stock market when the bears generally come out of hibernation. Some days – specifically the days surrounding the Triple-Witching Fridays – have somewhat more predictability that others. On Monday before the option expiration Friday, Dow Jones Industrial Averages have shown a tendency to weaken. Stock Trader’s Almanac noticed this first. We did more research and applied our proprietary entry-exit algorithm and developed a very good strategy to trade on the down side.
Since 1970, our strategy has produced 75% of winning trades for Dow. The average return is 0.5% with a 10-day holding period giving an annualized return of 16.2%. We have used leveraged ETFs, which were introduced few years ago, in our simulated Seasonal Almanac portfolio.
| Seq. | ETF | # of Trades | Win % | Avg. Return | Annualized | Days |
| 1 | DXD | 8 | 100% | 2.1% | 84.7% | 9 |
| 2 | SPXS | 6 | 80% | 11.8% | 145.8% | 9 |
The average return for the strategy is 2.6% with a 9-day holding period giving an annualized return of 107.5%.
Our algorithm generated an entry signal on the close Friday June 13th.
- Go long DXD at or near 25.77
- Go long SPXS at or near 27.05
We will send out an alert when the exit signal are generated, which will be later some times this week or next.
