The S&P 500 Index tends to peak on July 17, looking at 50 years' worth of data
The best day of the year to sell stocks will be next week, if past is prologue. According to recent data from Schaeffer's Senior Quantitative Analyst Rocky White, the S&P 500 Index (SPX) tends to peak on July 17, going back 50 years. Against this backdrop, we took it one step further by looking at the 25 worst-performing SPX stocks from July 17 to Oct. 31, going back a decade -- including semiconductor stock Advanced Micro Devices, Inc. (NASDAQ:AMD). We also outlined the 25 best stocks to own during this period -- featuring e-tail behemoth Amazon.com, Inc. (NASDAQ:AMZN) -- as well as the exchange-traded funds (ETFs) to buy and avoid.
SPX Underperforms After Mid-July
From May through the peak day of July 17, the S&P has averaged a gain of 1.34% in the past 50 years, per White. Since its April close this year, the broad-market barometer has added roughly 1.6% so far. Historically, after mid-July is when the index tends to underperform the most. From July 17 through Oct. 31, the SPX has averaged a loss of 0.15%.
25 Stocks to Sell Next Week
In the historically bearish period of July 17 to Oct. 31, the 25 stocks below tend to underperform. Popular stock Advanced Micro Devices is on the list, averaging a loss of 10.75% in this period, and ending higher just three times over the past 10 years. AMD stock was last seen 1% higher at $13.95, and yesterday got a lift from upbeat analyst attention. The semiconductor sector could stay in focus this week, too, with Semicon West -- a key trade show for the industry -- underway. Since dipping below $10 in May, Advanced Micro Devices stock has rebounded 40% off its 200-day moving average, but the overhead $14-$15 area has stifled the shares' upward momentum in 2017.
25 Stocks to Buy Next Week
Amazon stock is making headlines today, with the shares on pace for a third straight Prime Day in the red. At last check, AMZN stock has dropped 0.7% to trade at $989. Fundamentally, Amazon has been a beast this year, spreading its wings into the grocery business with its Whole Foods buyout, expanding its fashion presence with a subscription service, and most recently attempting to corner the IT help-desk market. The company's growing footprint has weighed on several stocks recently, including Wall Street newcomer Blue Apron, which cut its initial public offering (IPO) price after the AMZN/WFM deal.
Amazon stock could continue to outperform in the near term, too, if recent history is any indicator. The shares have averaged a healthy gain of 12.73% from July 17 to Oct. 31, looking back 10 years, ending this period higher 80% of the time. AMZN shares have added roughly 32% so far in 2017, and peeked above $1,000 last month, and while the broader Technology Select Sector SPDR Fund (XLK) has shed 1.3% in the past month, Amazon stock has added 1%.
Tech Rebound Could Take Hold
Speaking of the XLK, the tech ETF could also pick up steam starting next week. The fund sports the best win rate of all in the July 17-Oct. 31 period, ending higher 90% of the time in the past 10 years, and averaging a gain of 1.91%. Meanwhile, the First Trust Dow Jones Internet Index Fund (FDN) -- a fund that includes many FAANG stocks among its top holdings -- has averaged the best return during this period, gaining 3.88% with an 80% win rate.
Further making the case for a potential broader tech rebound -- as Schaeffer's Senior V.P. of Research Todd Salamone noted in this week's Monday Morning Outlook, the PowerShares QQQ Trust (QQQ) is trading near several layers of support. "The recently maligned large-cap technology group [could] experience a drift higher in coming weeks," he wrote.
On the other hand, traders who believe past is prologue may want to avoid the solar sector. While the Guggenheim Solar ETF (TAN) has been on a tear since its April lows, the fund has fared the worst in the July 17-Oct. 31 period, historically, averaging a loss of 12.85% -- the steepest by far -- and higher just 22% of the time.
