A Period of Interest for Short-Term Stock Index Traders
Key points
- The fourth quarter tends to be favorable for the stock market
- Specific periods within the fourth quarter have shown to be pretty consistent
- One such period includes the late November/early December period
Defining the period
The period we will consider here encompasses the following:
- The last six trading days of November
- The first three trading days of December
For 2025, this period extends from the close on November 19th through December 3rd.
Measuring historical results
The chart below displays the hypothetical growth of $1 invested in the S&P 500 Index only during this nine-trading-day period every year starting in 1951.
The table below displays year-by-year results.
24 of the last 26 years - and 33 of the last 37 - have seen the S&P 500 gain ground during this nine-day period. The table below summarizes S&P 500 performance during this nine-trading-day period.
Note that the worst loss (so far) for this period was -7.6% in 1973 - presumably a manageable amount for most traders. Also note that periods with movements of 3% or more, skewed to the positive side, by a factor of 17-to-4.
What the research tells us…
Favorable odds do not guarantee success; they merely highlight a potential edge. The good news in this instance is that the S&P 500 has historically performed well during the late November to early December period. The bad news is that there is no guarantee that things will follow suit in 2025. Is there anything "sure thing" about this period? Absolutely not. Are there any number of reasons that the stock market might decline over the next nine trading days? Of course. Still, the numbers are what they are, and they suggest a long-term edge during a short-term trading period. As such, aggressive short-term traders might consider giving the bullish case the benefit of the doubt in the days ahead (with reasonable risk management measures in place). Investors with cash to invest may consider doing so sooner rather than later, while those looking to lighten their stock holdings might consider waiting a little longer.