Score 8.8 (out of 10): US Utilities seaonsal rally of +2.7% in 1 month

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Insight:

UTILITIES SELECT SECTOR SPDR indicates an interesting seasonal (monthly for October) set up. During similar occasions, UTILITIES SELECT SECTOR SPDR shares had a median return of +2.7%, over the following 1 month – based on 11 historical occasions with 10 of those showing positive returns (91%). This buy signal for UTILITIES SELECT SECTOR SPDR received a high score of 8.8 (out of 10).

Details:

NameUTILITIES SELECT SECTOR
ViewUp
Star (1 to 10)8.8
Target+2.7%
Time1 month
Hit Rate91%

Returns during similar periods:

The chart above shows the previous returns (in %) based on similar setups with the most recent ‘insight’ shown under (1), the second most recent ‘insight’ shown under (2), etc. 

Previous episodes:

2.7% (October-2021), 5% (October-2020), -0.7% (October-2019), 2.1% (October-2018), 3.9% (October-2017), 1% (October-2016), 1.1% (October-2015), 7.8% (October-2014), 3.8% (October-2013), 1.4% (October-2012)

How have we arrived at this insight:

The conditions that led to similar insights previously have just been triggered in the market, making this ‘insight’ relevant right now.

While sorting through the mountains of data, our data engine detected a statistically relevant historical relationship between this ‘insight’ and the asset. Our data engine aims to optimize between statistical relevant relationships (high accuracy), situations that are relevant right now (entry timing) and ideal trade horizon (exit timing).

Based on the statistical significance of previous returns in similar situations, a high score indicates a more statistically relevant expected ‘future’ move for this particular asset. After calculating various scenarios, we found the optimal trade horizon for this particular relationship to be 1 month.

We calculate the median return for those previous situations (median is calculated by taking the ‘middle’ value, the value for which half the observations are larger and half are smaller) to determine the +2.7% estimated target return.

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