Gains Ahead? The "Halloween Indicator" and Winter Gains

Analysis of data going back to the creation of the Dow in the late 19th century by Hulbert Financial Digest suggests that the stock market performs significantly better from Halloween to May Day than May Day to Halloween.  This “Halloween Indicator” is well known and can be seen over the last year – the Dow gained 2.6% from Halloween 2014 to May Day 2015, and lost the same percentage in the subsequent summer months. Further, when the market has gained in September-October (as it has this year), the Halloween Indicator effect has produced an average of 6.8% gains compared with an average of 4% gains in other years.  This does not mean a bear market is impossible in the winter, of course, but the data does suggest that if a bear market begins, the summer months will see more significant losses than the winter months.