July Has Historically Been A Great Month For Stocks, Technology And Consumer Discretionary Stocks Lead

Over the last 20 years, July has emerged as a great month in terms of stock market performance. Over that time frame, the S&P 500 has experienced upward movement in 15 of those 20 years, accounting for a 75% success rate. On average, the S&P 500 has rallied 2.3% in July. This is applicable if trading the SPDR S&P 500 Trust SPY SPY or a similar ETF, and also applies to the typical direction of stocks in July.

Note that the chart says 2003 to 2022 so it reflects the last 20 completed months of July. Chart courtesy of StockCharts.com.

Over the past 10 years, the S&P 500 has performed even better. It has moved higher in nine of the last 10 years (90% of the time) and has averaged a gain of 3.5%.

Turning our attention to other indices for further confirmation, the NYSE Composite has witnessed upward movement in July in 15 of the last 20 years. That is 75% of the time, and the index has averaged a gain in July of 1.7%. Over the past decade, the NYSE Composite has experienced upward movement in nine out of ten years, with an average July return of 2.3%.

Similarly, the Nasdaq 100 index has shown upward movement in 17 of the last 20 years (85%). On average, this index has gained 3.6% in July. Over the past ten years, the average return has been 5.1% and the index has moved up in ten out of those ten years (100%). This would be applicable if trading the Invesco QQQ Trust Series.

Coming into July, Technology and Consumer Discretionary stocks have been some of the hottest sectors over the last three months. Continue to watch strong stocks within these sectors for trade setups on the long side. 

Always control risk with a manageable position size and have an exit point if a trade doesn't work out.