Seasonal MACD Sell Signal Update
As of today’s close, MACD indicators applied to DJIA and S&P 500 are positive. DJIA would need to drop 4770.50 points (–9.82%) in a single day to turn its MACD indicator negative while S&P 500 would need to decline 941.01 points (–13.36%) to turn its MACD indicator negative. Continue to hold long positions associated with DJIA’s and S&P 500’s “Best Six Months.” We will issue the Seasonal MACD Sell signal when corresponding MACD Sell indicators applied to DJIA and S&P 500 both crossover and issue a new sell signal.
The criteria to issue our Seasonal MACD Sell signal for DJIA, and S&P 500 is a new sell signal on or after the first trading day of April and both DJIA and S&P 500 must agree. The confirmation by both DJIA and S&P 500 is part of the criteria. For example, if DJIA’s Seasonal MACD indicator turns negative on a given day on or after April 1, but S&P 500’s does not, then there is no signal on that day. Both must be negative.
Our Seasonal MACD Sell indicator is calculated using daily closing prices with a short exponential moving average (ema) of 12 (days), a long ema of 26 (days) and a 9-day-period ema for the signal line. This is frequently written as 12-26-9 or in the accompanying charts as 12, 26, 9.
May 2026 Almanac & Vital Stats
May officially marks the beginning of the “Worst Six Months” for the DJIA and S&P. To wit: “Sell in May and go away.” Our “Best Six Months Switching Strategy,” created in 1986, proves that there is merit to this old trader’s tale. A hypothetical $10,000 investment in DJIA compounded to a gain of $1,316,635 for November-April in 75 years compared to just $4,253 for May-October (STA 2026, page 54). The same hypothetical $10,000 investment in the S&P 500 compounded to $1,147,286 for November-April in 75 years compared to a gain of just $16,592 for May-October.
May has been a tricky month over the years, a well-deserved reputation the May 6, 2010 “flash crash” only reinforced. It used to be part of what we once called the “May/June disaster area.” From 1965 to 1984 the S&P 500 was down during May fifteen out of twenty times. Then from 1985 through 1997 May was the best month, gaining ground every single year (13 straight gains) on the S&P, up 3.3% on average with the DJIA falling once and NASDAQ suffering two losses.
In the years since 1997, May’s performance has been erratic; DJIA up sixteen times in the past twenty-eight years (five of the years had gains exceeding 3.9%). NASDAQ suffered five May losses in a row from 1998-2001, down –11.9% in 2000, followed by sixteen sizable gains of 2.5% or better and seven losses, the worst of which was 8.3% in 2010 followed by another substantial loss of 7.9% in 2019.
Since 1950, midterm-year Mays rank poorly, #8 DJIA, #9 S&P 500, #6 NASDAQ, #6 Russell 1000 and #7 Russell 2000. Performance ranges from a best of +0.1% by Russell 1000 to a worst of –1.0% for Russell 2000. With nineteen years of data, only DJIA and S&P 500 have recorded more positive midterm Mays than negative. Russell 2000 has been down in seven of the last eleven midterm Mays.
Over the last 21 years, the first three days of May have historically traded higher, and the S&P 500 has been up 19 of the last 28 first trading days of May. Bouts of weakness often appear around or on the fourth, sixth/seventh/eighth, and after the twelfth trading day of the month while the last four trading days have generally enjoyed respectable gains on average, but the last day of May has weakened noticeably. In midterm years, May has generally opened with a gain, but by the third trading day broad weakness has set in and lasted until nearly the end of the month.
Monday before May monthly option expiration has been stronger than monthly expiration day itself. DJIA has registered only eleven losses in the last thirty-eight years on Monday. Since 1990, monthly expiration day has been a loser nearly across the board except for Russell 2000 with a slight average gain (+0.03%). However, over the more recent 25 years, monthly expiration day has improved with DJIA up 17 times. The full week had a bullish bias that has been fading in recent years with DJIA down seven of the last ten and S&P 500 down six of the last nine. The week after options expiration week tends to favor tech and small caps. NASDAQ has advanced in 25 of the last 36 while Russell 2000 has risen in 26 of the last 36 with an average weekly gain of 0.70%.