- We were told stocks would sell off in August and September.
- Equity indexes all over the world ripped higher.
- That’s the signal.
There’s an old saying on Wall Street that you want to “sell Rosh Hashanah” and “buy Yom Kippur.”
It comes from the tendency for stocks to sell off during the period between the two holidays. Since 1970, the S&P 500 has fallen an average of 0.4% during this period, dropping 57% of the time.
But rather than focusing on the selling part of the equation during Rosh Hashanah, I’m here to talk about buying during Yom Kippur, which is this Wednesday night-Thursday morning.
As my friend Jeff Hirsch points out in “The Stock Trader’s Almanac”, the S&P 500 rallies 70% of the time from Yom Kippur to Passover, with an average return of 6.4% and a median return of 7.7%.
“Buy in October and Get Yourself Sober”
Jeff Hirsch is a man of many great quotes. He’s the Yogi Berra of Technical Analysis.
His old saying, “Buy in October and get yourself sober,” has helped me over many years, particularly in more recent years when the market has really ripped in Q4.
This quote is based on the tendency for stocks to bottom out around October and rip into the fourth quarter.
In fact, according to our friends over at Carson Group, the fourth quarter is by far the best for stocks – with positive returns 80% of the time and an average gain of 4.2% going back all the way to 1950.

October has a reputation for being volatile, as many of the market’s greatest crashes have happened during the month.
Believe it or not, the first half of October is actually the third-best half month of the year, with a median return of 1.3%.
This chart from Neil Sethi shows the average performance since 1950 for all 24 halves of each month throughout the year:

This week, we enter one of the most bullish periods in the calendar.
Historically, we want to buy stocks on Yom Kippur – that’s this Wednesday and Thursday.
The fourth quarter of the year is historically the best quarter – that starts tomorrow.
The third-best two-week period of the year starts this week.
And, most importantly, the market has blatantly ignored the seasonal weakness we’ve historically seen during August and September.
This is probably the most bullish part of it all.
Ignoring Seasonal Weakness
Those of you who have been following me for years already know we don’t want to buy or sell stocks ahead of seasonally strong or weak periods just because history says that’s the higher probability.
It’s actually the exact opposite. We want to observe after the fact to see if stocks respected or ignored seasonal trends.
In other words, did stocks sell off during what is historically a bull period? Or did stocks rally during what was supposed to be a weak period?
That’s the signal.
And that’s what we just saw during what is historically the worst two-month period of the year.
Here’s a chart showing performance for various sector and index funds since August 1:

We were told stocks were going to sell off in August and September. But the S&P 500 and the Dow Jones Industrial Average each rallied more than 5%.
The Nasdaq-100 was up more than 6%, and the Russell 2000 was up double-digits.
Meanwhile, Asia was up 13%, Africa was up 15%, and Latin America led the way, rising almost 16% during this period.
Stocks ripped when they weren’t supposed to.
That’s the signal.
Buy Yom Kippur.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs