66
LAST-HALF OF JULY SHORT S&P 500
Active traders looking for a high probability play should pay heed to this potential market
move. Sell the September S&P 500 on or about July 15 and hold until on or about July 26. This
trade has a 67.9% success rate, registering 19 wins against 9 losses in the last 28 years. The
best win was $19,150 in 2002, and the worst loss was in 2009, posting a $12,650 bereavement.
Looking at the chart on page 140, you will
see the average price tendency is for a mid-
summer sell-off. Part of the reason is perhaps
due to the fact that July starts the worst four
months of the year in the NASDAQ and also
falls in the middle of the worst six months for the
Dow and S&P 500 indices.
Mid-July is also when we typically kick off
earnings season, where a strong early month rally
can fade, as active traders may have “bought the
rumor” or bought ahead on anticipation of good
earnings expectations and then turn around and
“sell the fact” once the news hits the street.
Watch for an early month rally, and pay close
attention, especially if we trade near the monthly
predicted resistance level using Pivot Point analy-
sis (2010 edition, pages 6–9). Market conditions
that tend to start out strong early in the month tend
to fade towards the middle to end of month. S&Ps
sold off early in July the past two years, creating
losses for this trade two years in a row. However,
using the timing tools detailed on pages 6–9 in
this edition and last year’s could have turned those
losses into profits with a little extra effort.
Active traders can also consider the elec -
tronic e-mini Futures (ES), and stock traders can
use the exchange-traded fund SPDR S&P 500
(SPY) and/or trade options on any of these equi-
ties. See pages 133–138 for additional correlated
trades.
ENTRY EXIT PROFIT/
YEAR DATE CLOSE DATE CLOSE LOSS
1982 7/15 113.50 7/26 111.20 $575
1983 7/15 165.15 7/26 171.40 –1,563
1984 7/16 153.65 7/25 150.35 825
1985 7/15 194.05 7/24 191.90 538
1986 7/15 235.05 7/24 238.40 837
1987 7/15 312.20 7/24 310.30 475
1988 7/15 272.80 7/26 266.15 1,663
1989 7/17 335.60 7/26 340.60
–1,250
1990 7/16 372.30 7/25 359.65 3,163
1991 7/15 384.50 7/24 380.75 938
1992 7/15 417.20 7/24 411.25 1,488
1993 7/15 449.75 7/26 449.05 175
1994 7/15 454.80 7/26 453.95 213
1995 7/17 565.45 7/26 564.05 350
1996 7/15 630.25 7/24 630.70 –113
1997 7/15 931.75 7/24 945.85 3,525
1998 7/15 1183.40 7/24 1147.40 9,000
1999 7/15 1419.40 7/26 1354.80 16,150
2000 7/17 1522.00 7/26 1469.00 13,250
2001 7/16 1210.50 7/25 1191.50 4,750
2002 7/15 920.60 7/24 844.00 19,150
2003 7/15 1000.90 7/24 980.30 5,150
2004 7/15 1103.40 7/26 1082.90 5,125
2005 7/15 1231.20 7/26 1235.00 950
2006 7/17 1240.50 7/26 1273.20 8,175
2007 7/16 1559.70 7/25 1524.70 8,750
2008 7/15 1211.50 7/24 1253.80 –10,575
2009 7/15 927.20 7/24 977.80 –12,650
28-Year Gain $52,088
JULY SHORT S&P 500 (SEPTEMBER)
TRADING DAY: 10—HOLD: 7 DAYS
Chart courtesy TradeNavigator.com
S&P 500 (SP) BARS AND SPDR S&P 500 (SPY) CLOSES
(WEEKLY DATA JANUARY 2009–MAY 2010)
S&P 500 Seasonal Pattern since 1982
c01_CTA_2011_pgs_12-119_c01_cta_2011_pgs_12-119 7/21/10 2:03 PM Page 66
MONDAY
4
TUESDAY
5
WEDNESDAY
6
THURSDAY
7
FRIDAY
8
SATURDAY
9
SUNDAY
10
Nothing gives one person so much advantage over another as to remain
always cool and unruffled under all circumstances.
Thomas Jefferson (3rd U.S. president, 1743–7/4/1826)
We will have to pay more and more attention to what the funds are doing. They are
the ones who have been contributing to the activity, especially in the high-fliers.
— Humphrey B. Neill (Investor, analyst, author, NY Times, 6/11/1966, 1895–1977)
I’ve learned that only through focus can you do world-class things, no matter how capable you are.
— William H. Gates (Microsoft founder, Fortune, July 8, 2002)
Unless you love EVERY BODY, you can’t sell ANY BODY. — (From Jerry Maguire, 1996)
Don’t be the last bear or last bull standing, let history guide you, be contrary to
the crowd, and let the tape tell you when to act.
— Jeffrey A. Hirsch (Editor, Stock Trader’s Almanac, b. 1966)
Independence Day
(Market Closed)
End Long Cocoa(U) (Jun. 2)
JULY
c01_CTA_2011_pgs_12-119_c01_cta_2011_pgs_12-119 7/21/10 2:03 PM Page 67

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