ETF & Stock Portfolio Updates: Losses Cut as Volatility Persists By: Christopher Mistal | April 10, 2025 | Email | Print

In the following table the “Worst Months” performance of DJIA, S&P 500, and NASDAQ have been separated by year of the four-year-presidential-election cycle going back to 1951 for DJIA and S&P 500 and 1971 for NASDAQ. NASDAQ’s “Worst Months” are July through October compared to May to October for DJIA and S&P 500. In 18 post-election year “Worst Months” periods, DJIA has averaged a meager 1.41%. S&P 500 is a modestly better +2.82%, while NASDAQ’s average is +3.57%. Frequency of gains or percentage of time higher in post-election years “Worst Months” ranges from 66.7% by S&P 500 to a solid 72.2%.

 

Despite gains occurring frequently in post-election year “Worst Months,” average performance for either a four- or six-month period is not all that exciting. Potentially of greater concern this year, is past Republican post-election year “Worst Months” (shaded in light gray in table below) as 2025 is continues tracking this historically bearish seasonal pattern. In past Republican post-election years, average performance is negative across the board, DJIA –2.83%, S&P 500 –2.13%, and NASDAQ –2.61%.

 

 

The worst of the tariff induced selloff may or may not be over yet. Economic growth is slowing, odds of a recession have risen abruptly, the U.S. is in a trade war with China, and this week’s tariff pause does not seem like a guarantee. Our research and history do suggest current market volatility is likely to recede, but it could be several months or longer before this happens. 

 

 

In accordance with last Thursday’s Seasonal MACD Sell signal email Issue, SPDR DJIA (DIA) and SPDR S&P 500 (SPY) have been closed out of the portfolio using their respective average prices from April 4. DIA was sold at a 9.2% loss and S&P 500 had a 11.6% decline, excluding dividends and any trading costs. Despite a relatively early MACD Sell signal, the market did not offer any meaningful respite from tariff induced heavy selling until yesterday, April 9.  

 

NASDAQ’s Seasonal MACD Sell signal has not triggered but associated positions in Invescos QQQ (QQQ) and iShares Russell 2000 (IWM) were stopped out on April 4 when they both closed below their respective stop losses. We had placed stop losses on these positions in the event the market did continue to break down, which it did initially. Today’s giveback of Wednesday’s sizable gains does suggest the closure of QQQ and IWM could still end up being a prudent action as market volatility and risk is still elevated despite the worst of tariffs being paused for 90 days, maybe. 

 

New positions in TLT, AGG, BND, SHV, and SGOV have been added to the portfolio as detailed in Thursday’s Seasonal MACD Sell issue. SHV and SGOV can be considered at current levels. TLT, AGG, and BND have exposure to long-dated Treasury bonds that have historically exhibited more price volatility than short-dated funds such as SHV and SGOV. The recent spike in long-dated Treasury bond yields was apparently a factor in the partial pausing of tariffs and warrants some additional caution. SHV and SGOV are currently our preferred bond ETFs due to their relatively stable prices and short duration bond holdings.

 

As a reminder, 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 year’s Seasonal MACD Sell signal for DJIA and S&P 500. 2025 is playing out like past weak Republican post-election years detailed on page 28 of the 2025 Almanac.

 

 

 

In accordance with Thursday’s Seasonal MACD Sell signal email Issue, iShares DJ Transports (IYT), SPDR Financials (XLF), SPDR Health Care (XLV), SPDR Industrials (XLI), Vanguard REIT (VNQ) and SPDR Materials (XLB) have been closed out of the portfolio using their average prices on April 4. The average loss across these positions was 10.2% excluding dividends and trading costs. This is a disappointing result, but decades of experience have proven it is best to stick to our strategy, especially during periods of high risk and elevated uncertainty when losses can explode suddenly.

 

Positions in Global X Copper Miners (COPX), SPDR Energy (XLE) and First Trust Natural Gas (FCG) were also closed out using their respective average prices on April 4. With odds of recession surging, these positions have been especially hard hit. As of today’s close, XLE and FCG are below our exit prices, while COPX, likely aided by gold’s rebound, is only modestly higher.

 

SPDR Technology (XLK) was stopped out on April 3 and was closed out of the portfolio using its average price on April 4.

 

SPDR Consumer Staples (XLP) and SPDR Utilities (XLU) are on Hold. XLU was added to the portfolio on April 4 when it dipped below its buy limit of $74.75. Before considering additional purchases, we would like to see the Treasury bond market calm down. If interest rates continue to move higher, XLP and XLU could come under pressure again.

 

 

 

Over the past four weeks, through the close on April 9, the Almanac Investor Stock Portfolio retreated 2.0% compared to a 2.5% decline by S&P 500 and a 5.6% loss by Russell 2000. In total, eight stock positions have been recently stopped out, seven since the start of April. Three were stopped out in the Small Cap section, four Mid-Caps and just a single Large Cap position. Five of the eight were stopped out with an average gain of 52.5%, however, the average loss for the declining positions was 24.0%. As of today’s close, the majority of the stopped-out positions are below their respective stops.

 

Prior to the market’s recent waterfall decline, the cash balance in the portfolio had been slowly expanding as the weakest positions began getting closed out in January and again in late February/early March. This rising cash balance did mitigate some damage and is likely to continue to do so as the market searches for clarity. With the “Worst Months” for DJIA and S&P 500 arriving early and market volatility spiking, new buying is likely to remain limited.

 

All remaining positions in the portfolio are on Hold. What remains has thus far proven to be somewhat resilient.