There are plenty of seasonal trading patterns.
- There’s the Santa Claus Rally, the Dogs of the Dow, and the January Effect
- There’s a theory that markets in the northern and southern hemispheres predictably succumb to the winter blues, or Seasonal Affective Disorder.
- There’s the “Sell in May and go away” idea that hasn’t worked so well.
There’s Even the Predictable New Year Resolution Trades
Every year, Americans (about 90% of them, according to Johns Hopkins Medicine) make their New Year’s resolution to lose weight, diet, and exercise more.
It’s a seasonal phenomenon that many of us are all too familiar with.
And this year won’t be much different, as we head into the season between our ritualistic Thanksgiving “stuffing,” holiday parties, and the December holidays. It’s when we start feeling fat, promise to diet, and even join a gym. It’s part of the reason related stocks tick higher.
- Look at Weight Watchers (WW) at the start of 2020. In the first couple weeks, the stock ran from a low of $34.70 to a high of $47.19. It then pulled back with the market.
- Medifast (MED) ran from a 2020 low of $104.71 to $112.05
- Planet Fitness (PLNT) ran from $74.19 to $88.77.
Even the Global X Health & Wellness Thematic ETF (BFIT) ran from $21.54 to $22.18.
Unfortunately, all pulled back when the Dow decided to plunge in early 2020. However, once the pullback was over, most of the above-mentioned stocks exploded higher. In our opinion, each could push to higher highs in 2021.
