Update to Seasonal Pattern for the Markets Post Independence Day

Tom Gentile

Posted in
Big Picture

By: Tom Gentile
July 7th, 2023

2 mins read

Options traders and investors may have noticed the markets did not trade in a bullish manner this holiday shortened week of trade.

One can look at what the SPY did this week of trade and say the pattern did not work. I would say, but wait what pattern are you talking about? We are only 3-days post-Independence Day and there was no bullish pattern on the grid for looking up to 10 days post the holiday that was a 3-day pattern.

Figure 1: SPY Historical Data of Avg. % Gain Highlighting 10 Days Post Independence Day
Figure 1: SPY Historical Data of Avg. % Gain Highlighting 10 Days Post Independence Day

The assessment of this table isn’t showing what to expect the first 3 days after the holiday, so any trades placed based on the expectation for the markets these last 3 days isn’t what was taught.

If one wants to assess the date for what 10- days post-Independence Day would be that would be July 18, 2023.

The average profit for the SPY is $3.64 so if you take the open price for the day after Independence Day, which is $441.91 and add just that average gain amount of $3.46 one can at least anticipate a move to $455.55.

This is and that was NOT a market call. This article is not saying that the SPY will move that amount, or it will be at that price July 18.

Options traders benefit with this type information by way of knowing a timeline and price projection of an underlying security.

Given this information/data one can consider a call option on the SPY with an expiration of at least past July 18, 2023, (the Friday expiration after this end date of July 18 if you will) is July 21.

We will update you all on what the SPY ended up doing using the analysis of the 10 days after Independence Day and that may happen in the Weekly Newsletter on Wednesday, July 19.

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