The S&P 500 is set up for a great year, and there are still gains to come. Seasonally, Q4 is the strongest of the year, typically rising 80% of the time, and there are other factors in play suggesting this year will follow suit. To begin, the onset of Q4 marks the end of the typically volatile summer trading season. Smart-money investors who “sold in May and went away” are coming back and ready to get back into the market. While September is usually weak, rising only about 50% of the time, October usually marks a bottom, rising about 60% of the time, with November and December to do the heavy lifting. In the best years, the Santa Claus Rally caps the seasonal rally and keeps the market rising into the New Year.
