The Dines
Letter's May Seasonalities
By James Dines, editor
The Dines Letter
Stocks:
The month of May used to be an inauspicious month for new
buying, but it has been improving. Despite many years of rising
markets, May has seen the DJI decline in 20 of the last 37 years,
54% of the time, or has proven to be the prelude to significant
declines in Junes or Julys that pave the way for the traditional
"Summer Rally." Since 1965, the period 1 May to 30
June has been a loser 62% of the time (23 out of 37 years). But,
note that eleven of the fourteen exceptions occurred in the last
19 years, so the period has been getting less bearish. According
to the Stock Traders Almanac, May is the beginning month
for the worst six months (May October) of the year, a bullish
factor for golds since they tend to move opposite the market.
The statistics were based on the Dow's average percentage change
from 1950-2001 as applied to an arbitrary investment portfolio
of $10,000.
Investors who nonetheless
insist on buying might as well do so before the start of Memorial
Day week, May 27 to May 31 this year. The DJI rose 12 years in
a row (from 1984-1995) during that week, also 1999 and 2000.
Downers during the Memorial Day holiday include 1996, 1997, 1998
and 2001. All told, the "Memorial week rally" has come
true 78% (14 of 18) of the time in the time in the last 18 years.
Precious Metals:
The Dines Gold Stock Average (DIGSA) has risen 17 times and declined
16 times (neutral once) in the past 34 Mays, for no significant
percentages to play. Same for the Silver Stock Average (DISSA):
up 17 and down 16 times (neutral once), in the last 34 Mays.
Conclusion: No precious-metals Seasonality to play in May. Editor's
Note: James Dines, "The Original Goldbug," expects
the biggest profit opportunities percentagewise to be
located within the Precious-Metals Sector in the coming period.
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