What Do The Next Six Months Hold?

The S&P 500 has traded sideways for three weeks now. Volume is not giving us a clue as to the direction it shall ultimately pick. The Stochastics indicator is working lower, indicating the index is closing lower within its recent range.

The Russell 2000, the small cap index, has been in a trading range for the past eight months. A recent rally couldn't conquer the March highs.

The NASDAQ Composite's chart did recently conquer the March highs, but trading quickly returned to the support level offered by the March highs.

The markets of course will be affected by major news events, and there certainly is a lot of potential for negative news right now. But, ignoring that for now, what historically lies ahead, say through the end of the year?

There are 24 weeks left in the year. The S&P 500's track record over that time has been for an average 4.4% gain, with gains in a pretty high 77% of the years:

But fall is when technology and other NASDAQ stocks shine. The NASDAQ, over the next 24 weeks, has averaged an 8.3% gain, with only 4 losing years:

Notice on both charts that the next few weeks have not had much action on average, but then the average picks up as we move into September and October (ignore the inevitable articles about how bad Septembers and/or Octobers have historically been – their way of analysis doesn't apply to our approach to short-term trading).

Enter new positions and manage existing positions very conservatively for the next few weeks. Consider taking profits. Keep your powder dry, as they say. Then as we venture into August, I believe the markets, if they have pulled back in the meantime, should start to pick up again. The opportunities from good seasonal track records will pick up then, and if good chart setups coincide, you may very well log some of your best profits for the year.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, please click on the following link: www.markettamer.com/seasonal

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2014 Stock & Options Training LLC

Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.

Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.

Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.

As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.

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