The Dines Letter: Seasonalities for June

By James Dines
The Dines Letter

        Stocks: Since 1961 June has been a down month twice as often for the DJI as up, with 32 downers and 16 gainers. One of those sixteen expectations took place in the raging bull markets of the 80s and 90s, which are behind us, so June's traditional negativity should reassert. May Tops typically transit through June, usually evolving into the traditional "Summer Rally" in July or August. Spring declines often bottom out in June, while July or August rebounds introduce more-positive seasonal markets. It is no surprise then that June ranks as the second-worst month for the Dow the last 59 years.
        Looking deeper into our records for Junes, in the context of years ending in "9," it seems to be a transit point from a first quarter bottom to a third or fourth quarter top. In the past 12 decades (1880-1990) seven (1889, 1899, 1909, 1919, 1959, 1989, 1999) of the 12 years ending in "9" made their bottoms in the first quarter and peaked in the third or fourth quarters! That pattern might be unfolding this year with the Dow having bottomed at 6,470 on 6 Mar 09, and then risen 33%. With an average gain of 26.5% from the said "9" years above, the Dow might settle at 8,180 around the third or fourth quarter this year.
        Golds: The Dines Gold Stock Average (DIGSA) in the last 41 Junes has risen 16 times and declined 25 times, so seasonal percentages are 61% bearish for gold shares this month. The Dines Silver Stock Average (DISSA) is also bearish (61%); up 15 and down 23 times in the past 38 years.
       Editor's Note: James Dines is editor of The Dines Letter, P.O. Box 22, Belvedere, CA 94920, 1 year, 14 issues, $295. www.DinesLetter.com.