Halloween Indicator
Utility stocks have previously been identified as leading indicators for broad stock market movements, and important new research not only confirms the predictive power of utility stocks but also puts it to work in a fairly simple strategy which rotates into and out of utility stocks based on the relative strength of the sector.
A team of researchers set out to disprove the old adage "sell in May and go away" — and were stunned to discover that the data backed it up.
The Halloween indicator, popularized by the well-worn adage, “Sell in May and go away,” holds that stocks offer their best returns during the November through April period. Recent research seems to confirm earlier studies, which have found that this stock market anomaly dating back at least to the 1930s has not been arbitraged away, and in fact, is stronger than ever.