Seasonality tells us that the months from the end of October (the Halloween Indicator) through the end of April, are in fact the best months of the year for investing while the six months from May through October are the "worst."
Stock Traders Almanac has done some fine research in seasonality and their work indicates that the market generates better rates of return from November through April than from May through October. Furthermore, investing in just the six good months of the year has generated better results than the overall return of the major indexes while having been invested for only half the time, thereby reducing your market risk and freeing up your assets to earn interest in low risk money market or Treasury investments.
So will the "Halloween Indicator" work this year? It seems to be off to a good start as we have seen recent gains which have been near vertical and could be the start of a new seasonal bull market.
On a fundamental level, much of what happens from now until the end of the year will depend upon Europe and overall economic developments.
Read the rest of John Nyaradi’s article on MarketWatch.com
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