Stock Trader’s Almanac Turns Short-Term Bearish
From Jazzy Jeff Hirsch:
As of today’s close, slower moving MACD indicators applied to both DJIA and S&P 500 are negative (arrows in the charts below point to a crossover or negative histogram). We are issuing our Best Six Months MACD Seasonal Sell signal for DJIA and S&P 500. NASDAQ’s “Best Eight Months” lasts until June.
Almanac Investor Tactical Seasonal Switching ETF Portfolio Trades
SELL SPDR DJIA (DIA) and SPDR S&P 500 (SPY) positions. For tracking purposes these positions will be closed out of the portfolio using their respective average prices on May 19.
Continue to HOLD Invesco QQQ (QQQ) and iShares Russell 2000 (IWM) as NASDAQ’s “Best Eight Months” does not end until June.
For this “Worst Months” period we have presented some low-fee ETFs where cash from the positions that are being closed out can be used ranging from relatively low-risk/low-reward to higher-risk/potentially higher reward. Please, consider your individual risk tolerance and investment objectives when choosing.
Consider establishing a position in iShares Short Treasury Bond (SHV) with a Buy Limit of $110.30.
Consider establishing a position in iShares 0-3 Month Treasury Bond (SGOV) with a Buy Limit of $100.60.
Although we would consider SHV and SGOV to be low-risk/low-reward options given their relatively stable prices, they have respectable yields. With longer-dated Treasury bond yields creeping higher (prices going down) due to rising inflation expectations brought on by higher energy costs, our preferred funds are SHV and SGOV at this time.
For tracking purposes, SHV and SGOV will be added to the portfolio on May 19, using their respective average prices.
Vanguard Total Bond Market (BND), iShares Core US Aggregate Bond (AGG), and iShares 20+ Year Treasury Bond (TLT) were all added to the portfolio on May 4, when they all dipped below their respective buy limits. BND, AGG, and TLT are on Hold.
Lastly, positions in cash and/or money market funds can also be considered. Choices yielding 3.5% are available. An allocation to cash or a money market fund will likely be the least nerve-racking position should market volatility spike during the “Worst Months.”
Traders/investors following the Best 6 + 4-Year Cycle switching strategy detailed on page 64 of the Stock Trader’s Almanac 2026 should heed this Seasonal Sell signal. Even if you are not actively trading the “Best Months” switching strategy, it is still a good reminder to review existing holdings and consider a cautious stance.
Almanac Investor Sector Rotation ETF Portfolio Trades
Sell iShares DJ Transports (IYT) as its correlating seasonality has historically ended in the beginning of May. For tracking purposes IYT will be closed out of the portfolio using its average price on May 19.
SPDR Healthcare (XLV) and iShares US Technology (IYW) can still be considered on dips below their respective buy limits.
SPDR Consumer Staples (XLP), iShares Biotechnology (IBB), and SPDR Biotech (XBI) have been added to the portfolio and can be considered on dips or at current prices up to their respective buy limits.
SPDR Utilities (XLU) can still be considered at current prices up to its buy limit.
XLU, XLP, XLV, IYW, IBB, and XBI are “Worst Months” defensive trades based upon their corresponding sectors’ historical tendency to outperform the S&P 500 from May through October.
All other holdings in the Sector Rotation Portfolio are on Hold.
Today’s Seasonal MACD Sell Signal for DJIA and S&P 500 marks the beginning of the “Worst Six Months” for DJIA and S&P 500. We do not simply sell and go away. Instead, today’s trades are the start of tactical adjustments that will be made in the portfolios. Between now and when NASDAQ’s Seasonal MACD Sell Signal triggers (earliest it can trigger is on June 1 this year), the portfolios will be shifted toward a neutral stance. Positions that have historically performed well during the “Worst Months” will be held along with positions that correlate to NASDAQ and Russell 2000.
All current stock and ETF holdings will be reevaluated in upcoming email Alerts. Weak or underperforming positions may be closed out, stop losses may be raised, new buying may be limited, and we will evaluate the timing of adding additional positions in sectors that perform well in the “Worst Six Months” and potentially a new basket of defensive stocks.
Position: None
