Tactical Seasonal Switching Strategy – Tariffs Shock Market By: Jeffrey A. Hirsch & Christopher Mistal | April 03, 2025 | Email | Print

As of today’s close, slower moving MACD indicators applied to DJIA and S&P 500 are negative (arrows in the charts below point to a crossover or negative histogram on the slower moving MACD used by our Seasonal Switching Strategy to issue a sell signal). 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.

 

 

 

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 April 4. 

 

Per the Seasonal Switching Strategy, continue to HOLD Invesco QQQ (QQQ) and iShares Russell 2000 (IWM) as NASDAQ’s “Best Eight Months” ends in June. In the event the market doesn’t find some support and stage at least a modest rally in the near term, we have added suggested stop losses to IWM and QQQ in the portfolio table below.  

 

For this “Worst Months” period we are once again going to present 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 $110.20. Contrary to its name, SHV is NOT a short bond fund, instead it holds short-duration Treasury bonds that mature in less than one year. You can view all relevant information at https://www.ishares.com. 

 

Consider establishing a position in iShares 0-3 Month Treasury Bond (SGOV) with a Buy Limit of $100.50.

 

Although we would consider SHV and SGOV to be low-risk/low-reward options given their relatively stable prices, they currently have respectable yields. Even if the Fed does cut interest rates, the short-duration nature of their respective holdings is likely to keep their prices relatively stable as their yields adjust.

 

Consider establishing a position in Vanguard Total Bond Market (BND) with a Buy Limit of $74.25. 

 

Consider establishing a position in iShares Core US Aggregate Bond (AGG) with a Buy Limit of $99.75.

 

We would consider BND & AGG to be moderate-risk/moderate-reward. Prices for BND and AGG have historically been more volatile than SHV and SGOV but because of their broad bond market exposure their price moves tend to be more subdued than purely long-dated Treasury bond yields. Should the U.S. slip into recession and should Treasury yields decline, BND and AGG could see moderate price appreciation.

 

Consider establishing a position in iShares 20+ Year Treasury Bond (TLT) with a Buy Limit of $92.50. TLT’s holdings are more concentrated than the holdings of BND or AGG and its price has historically moved in a greater range. Should long-dated interest rates decline substantially, TLT could experience an outsized price advance relative to other bond ETFs. However, should inflation accelerate and/or the Fed delays lowering rates, TLT could retreat. TLT is likely best for aggressive traders with a higher risk tolerance.

 

Buy limits for SHV, SGOV, BND, AGG, and TLT are currently above market prices and represent our suggested maximum price to pay. For tracking purposes, all five positions will be added to the Tactical Seasonal Switching Strategy portfolio using their respective average prices on April 4. 

 

Lastly, consider a position in cash and/or a money market fund. Options yielding around 4% are available. An allocation to cash or a money market fund will likely be the least nerve-racking position should market volatility remain elevated during the “Worst Months.” It also has the potential advantage of making the summer months all that much more enjoyable. 

 

Traders/investors following the Best 6 + 4-Year Cycle switching strategy detailed on page 64 of the Stock Trader’s Almanac 2025 should heed this Seasonal Sell signal and consider moving into suggested bond ETFs above or similar cash and cash equivalents.

 

 

 

Sell iShares DJ Transports (IYT), SPDR Financials (XLF), SPDR Health Care (XLV), SPDR Industrials (XLI), Vanguard REIT (VNQ) and SPDR Materials (XLB) as correlating seasonalities end soon. For tracking purposes IYT, XLF, XLV, XLI, VNQ and XLB will be closed out of the portfolio using their respective average prices on April 4.

 

Sell Global X Copper Miners (COPX), SPDR Energy (XLE) and First Trust Natural Gas (FCG). Today’s worse than major index performance by these ETFs suggests the odds for slower growth and recession have increased. COPX, XLE, and FCG will also be closed out on April 4 using their respective average prices.

 

As of today’s close, SPDR Technology (XLK) has been stopped out. Sell XLK.

 

Continue to Hold SPDR Consumer Staples (XLP). Historically, consumer staples have been a defensive sector during periods of uncertainty and market retreats. XLP’s advance today suggests this remains valid even now.

 

SPDR Utilities (XLU) can still be considered on dips. XLU also has a respectable history of being a defensive sector.

 

 

Today’s Seasonal MACD Sell Signal for DJIA and S&P 500 marks the early beginning of the “Worst Six Months.” Between now and when NASDAQ’s Seasonal MACD Sell Signal triggers (earliest it can trigger is on June 2 this year), the portfolios will likely be shifted toward a defensive stance.

 

Remaining stock and ETF holdings will be continuously reevaluated in upcoming email Issues. Additional weak and/or underperforming positions may be closed out, stop losses may be raised, and new buying may be limited. We will also evaluate the addition and timing of new positions in sectors that have historically performed well in the Worst Six Months and during periods of elevated market uncertainty.