In the UK, the FTSE 100 has risen 61.8 per cent of the time in November and by an average of 1.1 per cent. This isn’t the strongest of months - April and December have historically been more consistent winners and by larger proportions. But the tendency towards gains in British equities next month has actually become stronger over the last few decades.
The bullish seasonal bias in the 11th month simply makes me even keener to establish long positions if the opportunities arise. I am projecting a move in the FTSE 100 up to new bull-market highs above 6107 before long. Given a bounceback from oversold conditions or a swing-chart buy-signal, I am especially likely to buy in November.
The record of US equities in November is very similar to that of British shares. The Dow Jones index - for which we have data going back to 1900 - has gone up by an average of 0.9 per cent, and has risen 60.7 per cent of the time. I am targeting a rally before long on Wall Street to take the Dow up to new bull-market highs above 14,000 and the S&P above 1500.
The US Presidential Election - to be held on 6 November - provides another positive seasonal factor for equities. Since the second half of the 20th century, the S&P has done especially well around these periods. And, two important short-term cycles are due to turn around this time as well. The 38- and 87-day cycles converge on 9 November. A low near that date would therefore be a great buying opportunity, in my view.
S&P's hot date for November
Compared with stocks, gold is not as strongly seasonal in its behaviour. But the 11th month qualifies as one of its better times. The yellow metal has risen six years out of 10 in November, going back to the start of its traded history in 1968, and by an average of 1.4 per cent. I am looking for the price to return to its record peak of $1925 in the not-too-distant future, so will look to latch on to any strength in the coming weeks.
Somewhat curiously, silver has not typically shared in gold’s good fortune in November. The semi-precious metal is actually more likely to register a loss than a gain in the coming month. Its median decline has been 0.74 per cent, with increases coming only four years in every ten. Nevertheless, if gold rallies convincingly, I would expect silver to join in, especially given the amount of newly-created cash pouring into the financial system right now.
Another commodity that has tended to suffer weakness in November is Brent Crude Oil. The black stuff has on average registered a loss of 1.3 per cent in the 11th month, and has risen barely more than four years in every 10. In light of its recent declines, therefore, I am somewhat wary of the near-term outlook here, particularly if it has breaches $106.40 soon.
