$SPDR S&P 500 ETF Trust(SPY)$ $Invesco QQQ(QQQ)$ $Apple(AAPL)$ $Amazon.com(AMZN)$ $Tesla Motors(TSLA)$
July Jitters: Mastering the Mid-Season Slump with Smart Defensive Moves!
Kia ora Tiger traders,
Buckle up, it's time to flip the script! As we roll into the end of July, the market is heading into its seasonal weak spot—think of it as the "mid-season slump" in your favourite TV show. We're talking about the time when things slow down, especially for stocks outside the tech bubble!
Forget about those long call options for now. Instead, go short-term or chill on the sidelines until we see the next big move. Around July 26th-27th, expect most non-tech stocks to stall. It's like the Summer break where everyone's on holiday! Winter in New Zealand 🇳🇿 , Australia 🇦🇺 & the Southern Hemisphere but we are impacted by this Summer Seasonality!
But hold up, our tech titans (Apple, Microsoft, Amazon, Tesla, and QQQ) might throw some surprises post-earnings. They could spike or cause a short-covering wave. Just remember, not all stocks will ride this 🌊 !
Here are a selection of top ETFs and stocks that may be likely to be affected by a decrease due to seasonal weakness, considering their high trading volumes:
1. SPDR S&P 500 ETF (SPY): This ETF represents the S&P 500 index, which includes the largest companies in the US. Historical data shows that July can be a volatile month for this index.
2. Invesco QQQ Trust (QQQ): This ETF tracks the Nasdaq 100 index, which is heavily weighted towards tech companies. Despite tech stocks’ resilience, July can still bring volatility.
3. Vanguard Total Stock Market ETF (VTI): This ETF covers the entire US stock market, making it susceptible to broad market trends, including seasonal weakness in July.
4. Apple Inc. (AAPL): As a major component of both the S&P 500 and Nasdaq 100, Apple’s performance is often influenced by overall market trends, including seasonal weakness.
5. Microsoft Corp. (MSFT): Similar to Apple, Microsoft is a significant player in both major indices and can be affected by broader market movements in July.
6. Amazon.com Inc. (AMZN): Amazon is another tech giant that, while usually strong, can experience seasonal dips along with the rest of the market.
7. Tesla Inc. (TSLA): Tesla’s stock is known for its volatility and is also part of the Nasdaq 100. Seasonal weakness can lead to significant fluctuations in its stock price.
These stocks and ETFs are heavily influenced by overall market conditions, making them more susceptible to seasonal trends such as the Summer doldrums. Diversifying your portfolio with defensive stocks or sectors might help mitigate some of these risks during periods of anticipated weakness.
🚨 Extreme Caution Alert! 🚨 Mark your calendars for July 27th! 🗓️ That’s when the stock market rollercoaster takes a wild turn. 🎢 Brace yourselves, because we’re about to dive into the financial matrix!
📈 AMZN (Amazon): Picture this—August 1st, the day AMZN soared like a SpaceX rocket. 🚀 But hold your horses, because it was the last gap-up before the storm. 🌩️
💼 MSFT (Microsoft): Ah, MSFT—the underdog of last year’s tech race. 🐢 It didn’t exactly breakdance its way to the top. Just a little bump, like a nerdy kid at the school dance. 🤓
🔥 META (formerly Facebook) and GOOGL (Google): These two? Oh, they’re the rockstars! 🎸🤘 They spiked like they were at a Coachella after-party on July 26th-28th. 🌟 But guess what? They didn’t wait around for AMZN to trip and fall. Nope, they moonwalked outta there! 🌠
So, fellow traders, keep your shades on, your emojis ready, and your coffee strong. ☕️👓 Because this market drama is about to get lit! 🔥💸
Non-tech stocks like Coca-Cola (KO), Procter & Gamble (PG), Johnson & Johnson (JNJ), and big ETFs like SPY and IWM will likely feel the Summer doldrums.
Fun fact: July 2019 saw the worst market drop for this month ever with a decline of -3.08%!
It’s time to think defence, not offence. Here are the top 5 defensive stocks and ETFs to rotate into:
1. UnitedHealth Group (UNH) - A giant in the healthcare sector, providing stability during market turbulence.
2. Coca-Cola (KO) - Known for its resilience and consistent performance, even in shaky markets.
3. Procter & Gamble (PG) - A staple in consumer goods, offering reliable returns.
4. Invesco S&P 500 Low Volatility ETF (SPLV) - Focuses on the least volatile stocks in the S&P 500, providing a smoother ride during downturns.
5. Vanguard Value ETF (VTV) - Invests in stable, high-value companies that are less likely to experience dramatic shifts.
Fun Facts About Seasonality:
1. Summer Doldrums: The term "Summer doldrums" refers to the stock market's tendency to experience slowdowns during the summer months due to lower trading volumes.
2. Worst July: July 2019 saw the worst market drop for this month ever with a decline of -3.08%!
3. Quarterly Trends: The third quarter (July-September) is historically the weakest, with an average return of only 0.72%, making it a tricky period for investors.
4. Sector Rotation: During periods of seasonal weakness, investors often rotate out of growth stocks and into more defensive sectors like consumer staples and healthcare.
5. Historical Patterns: The belief that North American markets rally in the Summer is a myth; studies show that the Summer rally is inconsistent and unpredictable.
Quotes to Inspire:
- "Be fearful when others are greedy and greedy when others are fearful." — Warren Buffett
- "In the business world, the rearview mirror is always clearer than the windshield." — Warren Buffett
- "The stock market is designed to transfer money from the Active to the Patient." — Warren Buffett
- "Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it." — Warren Buffett
Chart:
Historical Performance of the Stock Market During July](sandbox:/mnt/data/July_Performance_Chart.png?_chatgptios_conversationID=a3a7b12c-52b5-4fba-9301-b0e8adb3596c&_chatgptios_messageID=a1a220e5-8aeb-4b66-a652-605b2a8a39fb)
Historical Data (July Performance):
• 2002: -22.10%
• 2003: 28.68%
• 2004: 10.88%
• 2005: 4.91%
• 2006: 15.79%
• 2007: 5.49%
• 2008: -37.00%
• 2009: 26.46%
• 2010: 15.06%
• 2011: 2.11%
• 2012: 16.00%
• 2013: 32.39%
• 2014: 13.69%
• 2015: 1.38%
• 2016: 11.96%
• 2017: 21.83%
• 2018: -4.38%
• 2019: -3.08%
• 2020: 18.40%
• 2021: 28.71%
• 2022: -18.11%
• 2023: 26.29%
Have you noticed the Summer doldrums in your trading? Share your stories in the comments! Are you prepared for the seasonal weakness? Which defensive stocks or ETFs are you eyeing up Tigers?
TigerGPT@TigerGPT ~ What are the most effective strategies for managing portfolios during periods of seasonal market weakness, particularly in July?
Stay sharp and strategise!
Happy Summer Seasonal trading ahead! Cheers, BC 🍀
@Tiger_Earnings @TigerOptions @TigerStars @Tiger_comments @MillionaireTiger @Daily_Discussion
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
During periods of seasonal market weakness, particularly in July, it is important to employ effective strategies to manage portfolios. Here are some strategies to consider:
Diversification: Maintain a well-diversified portfolio across different sectors and asset classes. This can help mitigate the impact of seasonal weakness in specific industries or stocks.
Defensive Stocks: Consider investing in defensive stocks that tend to be less affected by market downturns. These stocks are typically found in sectors such as consumer staples, healthcare, and utilities. They often have stable earnings and dividends, providing a cushion during market volatility.
Quality Companies: Focus on high-quality companies with strong fundamentals, such as solid balance sheets, consistent earnings growth, and competitive advantages. These companies are more likely to weather market downturns and recover faster when the market rebounds.
Risk Management: Implement risk management strategies, such as setting stop-loss orders or using options to hedge against potential downside risks. This can help protect your portfolio from significant losses during periods of market weakness.
Active Monitoring: Stay vigilant and closely monitor market trends, news, and company-specific developments. This will enable you to make informed decisions and adjust your portfolio accordingly.
Cash Allocation: Consider holding a portion of your portfolio in cash during periods of market weakness. This provides flexibility to take advantage of buying opportunities that may arise when the market recovers.
Long-Term Perspective: Maintain a long-term investment horizon and avoid making impulsive decisions based on short-term market fluctuations. Remember that market weakness in July is a seasonal pattern and does not necessarily reflect the long-term prospects of the market or individual stocks.
It is important to note that these strategies are general guidelines and may not be suitable for everyone. Each investor's risk tolerance, investment goals, and time horizon should be taken into consideration when implementing portfolio management strategies.
Risk Disclaimer: The information provided is for reference purposes only and does not constitute investment advice. Investing in the stock market involves risks, including the potential loss of principal. It is recommended to consult with a qualified financial advisor before making any investment decisions.