By Jeffrey A. HirschChief Market Strategist

June has shone brighter onNASDAQ stocks over the last 48years as a rule ranking eighth with a0.6% average gain, up 26 of 48years. This contributes toNASDAQ’s “Best Eight Months”which ends in June. June ranksnear the bottom on the Dow JonesIndustrials just above Septembersince 1950 with an average loss of0.3%. S&P 500 performs similarlypoorly, ranking tenth, but essentiallyflat (–0.02% average).

In pre-election years since 1950,June ranks no better than mid-pack. June is the #8 DJIA month inpre-election years averaging a0.8% gain with a record of nineadvances in seventeen years. ForS&P 500, June is #5 with anaverage gain of 1.2% (10-7 record).Pre-election year June ranks #6 forNASDAQ with an average gain of1.9%. Recent pre-election yearJunes in 2015, 2011 and 2007 weretroublesome for the market as DJIA,S&P 500 and NASDAQ all declined.

The second Triple Witching Week ofthe year brings on some volatiletrading with losses frequentlyexceeding gains.On Monday of Triple-Witching Week theDow has been downthirteen of the lasttwenty-two years.Tr i p l e - W i t c h i n gFriday is better, upten of the last

sixteen years, but weaker over thepast 26 years, up fourteen, down

Volume 5, Issue 6 Published by Probabilities Fund Management, LLC June 2019

June Almanac: Better in Pre-Election Years

June Almanac 1

June Outlook 2

Market at a Glance 4

Inside

(continued on page 2)

On the heels of one of the strongest January to Aprilstarts, May was destined for weakness. But this bodeswell for June. May is notoriously weaker in pre-electionyears, like 2019, and after big starts to the year. The firstfour months of 2019 were up 17.5% for the S&P 500, thethird best since 1950. Following the previous top 20 starts May was down 9 times for an average gain of0.2%. June is more bullish in general during pre-election years and even more so after weak Mays.After big starts, 7 of the 9 subsequent May declineswere followed by big gains in June.

Bonds yields have been falling and an inverted yieldcurve is not agreat sign, butour researchfinds that it reallyisn’t until theEffective FedFunds Rate ishigher than theentire yieldcurve, includingthe long end,that you get anindication that arecession isimminent. Evenstill the twoc o m p l e t einversions backin December

1985 and December 1986 were years before Gulf War1 fueled the July 1990 to March 1991 recession. Pointbeing these short-middle end yield curve inversions arenot especially indicative of an impending recessionanytime soon. The Fed projected slowing growth andthey can fix the inverted yield curve in a single action.Plus this is right in line with bond seasonality. Falling yields are typical this time of year during theworst six months.

Technically the market is under pressure and lookingfor support here at S&P 2775, which sits right at the

Page 2The Seasonal Strategist

twelve with an average loss of 0.23%. Full-weekperformance is choppy as well, littered with greater than1% moves in both directions. The week after Triple-Witching Day is horrendous. This week has experiencedDow losses in 25 of the last 29 years with average lossesof 1.09%. NASDAQ has fared better during the weekafter, but this trend appears to be fading.

June’s first trading day is the Dow’s best day of themonth, up 24 of the last 31 years. Gains are sparsethroughout the remainder of the month until the lastthree days when NASDAQ stocks begin to exhibitstrength. The last day of the second quarter is a bit of aparadox as the Dow has been down 17 of the last 28while NASDAQ has nearly the opposite record.

(continued from page 1)

June Almanac: Better in Pre-Election Years

June Outlook: May’s Selloffs Yield June Boons

(continued on page 3)

Page 3The Seasonal Strategist

Joseph B. Childrey, Mary C. Gray,Founder & CIO COO

Jeffrey A. Hirsch, Christopher Mistal,Chief Market Strategist Chief Compliance OfficerEditor, Stock Trader’s Almanac Director of Research

Probabilities Fund Management, LLCA registered investment advisor.

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Allen Shepard, PhD, Robert B. Ausdal, Jr., CFA,Research Consultant Research Consultant

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Index Definitions: The S&P 500 Index is an unmanaged composite of 500 large capitalization companies. This index is widely used by professional investors as a performance benchmark for large-cap stocks. The Dow Jones Industrial Average (‘DJIA’) is an unmanaged composite of 30 widely held stocks. The NASDAQ Index is an unmanaged composite of the common stocks and similar securities listed onthe NASDAQ Stock Market. The Russell 2000 Index is an unmanaged composite of the bottom 2,000 stocks in the Russell 3000 Index. TheRussell 3000 Index is an unmanaged composite of the 3,000 largest publicly held companies incorporated in America as measured by totalmarket capitalization. The Russell 2000 index is widely used by professional investors as a performance benchmark for small-cap stocks.Youcannot invest directly in an index and unmanaged index returns do not reflect any fees, expenses or sales charges. Past performance doesnot guarantee future results.

June Outlook: May’s Selloffs Yield June Boons

200 DMA, but also runs through several gaps,consolidations and resistance levels over the past yearand a half. It tested 2775 May 29 and bounced off itagain May 30. 2725 is the next level of support near theMarch lows — a 7.5% correction. The next level ofsupport is 2650, at the top of the December V-drop and end of January breakout — a 10% Correction. Then 2580 at the February/April 2018 lows — 12.4% correction.

President Trump and the Fed are highly sensitive tomarket action. Last fall was a case in point. The Fed dida 180 and ceased the rate tightening cycle and Trumpdelayed the tariffs. If the stuff hits the fan and the marketnears bear territory both will likely act quickly. Mr. Trumpis a business and market cycle watcher and knows heneeds a bull market for reelection. He has hung his haton it. Expect a deal with China after the summer orsooner if the market drops further so that Trump canpoint to new highs as we head into the election year.

The recent decline in market sentiment is not a bad sign.Market sentiment is generally a contrary indicator.Markets climb walls of worry because folks on the sidelineslowly feel left out and creep back in. Market Sentimentwas elevated recently but not extreme. Besides it’s theworst six months and markets struggle at this time of year.Add in the China trade battle and domestic politicalsquabbles and folks are prone to shift their attention awayfrom Wall Street and head for the beach.

As illustrated in the accompanying chart, overall themarket is tracking the seasonal patterns quite closely,especially for a pre-election year — albeit with a bitmore magnitude than average. We are not expecting abear market to emerge in the near-term, but acorrection or pullback like the market experienced inQ4 of last year is now in the cards. After the market’sstellar four-month run, at a bare minimum a period ofbacking and filling in the near-term is likely. While we donot anticipate much upside over the next 5 months orso, June is set up for a boon.

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Page 4The Seasonal Strategist

“fear has sentInvestors Intelligence

Advisors Sentimentsurvey bulls to

62.3%, bears down to 15.1% and

correction camp has shrunk to

just 22.6%.”

Market at a Glance

For more information about our strategies, productsand services, including updated fact sheets, performance summary reports and prospectuses,

visit our website: http://www.probabilitiesfund.com or call AdvisorServices today at (800) 519-0438.

The material provided herein has been provided byProbabilities Fund Management, LLC and is for informationalpurposes only. Probabilities Fund Management, LLC is theadviser to one or more mutual funds distributed throughNorthern Lights Distributors, LLC member FINRA/SIPC.Northern Lights Distributors, LLC and Probabilities FundManagement, LLC are not affiliated entities.

MoreInformation

Seasonal: Neutral. June is the second month of DJIAand S&P 500 “Worst Six Months,” it also is the lastmonth of NASDAQ “Best Eight Months.” Historically atepid month, June has recorded respectable gains inpre-election years and following down Mays in yearswith strong starts.

Psychological: Slipping. According to Investor’sIntelligence Advisors Sentiment surveybulls are at 49.0%. Correctionadvisors are at 33.7% andBearish advisors are 17.3%.Bullish advisors exceeded50% for thirteen weeksstraight peaking at 56.4at the end of April andhave been below 50%for the past tworeadings. This declinein bullish sentiment islikely being driven byrecent market declinesand the start of the “WorstSix Months.” Decliningbullish sentiment is a positive,but it has not yet reached levels typically associated with new buying opportunities.

Fundamental: Reasonably firm. Even though firstquarter U.S. GDP was revised down to 3.1%, it is stillabove 3% and past estimates. This suggests thatthere is a reasonable chance that current Q2estimates are also low. Q1 corporate earnings werealso better than widely anticipated. Yes earnings

compared to year ago figures were not spectacular,but they are still growing and expected to acceleratelater this year and next. Unemployment is alsoconsistently low and stable while wages andproductivity are improving. The “sugar high” from tax cuts has ended, but the overall outlook is still looking fair.

Technical: Consolidating? DJIA, S&P 500and NASDAQ all had great runs from

the December lows. S&P 500and NASDAQ even traded at

new all-time highs, DJIA didnot. The current pullbackcould be blamed on a myriad of things,valuations, earnings,trade, geopolitics,“Sell(ing) in May,” etc.Or perhaps it is just a

typical May pullback likemany of our charts and

patterns suggested prior.Nonetheless, early March lows

have not been violated by allthree indices and selling appears

to be abating.

Monetary: 2.25-2.50%. Partial yield curve inversion,slowing growth estimates and below target inflationmetrics. That single sentence alone is probablyadequate support for a rate cut or two by the Fed.Likely that is exactly what the Fed will do next. Theonly hurdle is the lingering belief that rates should behigher because they used to be higher in the past.

“Partial yield

curve inversion, slowing

growth estimates and below

target inflation metrics. That

single sentence alone is probably

adequate support for a rate cut or

two by the Fed. Likely that is

exactly what the Fed will

do next.”

6478-NLD-06/03/2019