This chart shows the CrystalBull Calendar Indicator (yellow) in relation to the S&P 500. The CrystalBull Calendar Indicator trades solely based on the month of the year. It is a modernized version of the "Sell in May and go away" adage.
It is important to note that CrystalBull.com does not place much weighting in this type of indicator. We believe history will show that the large market selloffs avoided by this model were coincidentally late in the year. While there is a valid consideration for the momentum of cash flows in late December through April (resulting from the US income tax code vis-a-vis retirement account funding), and the doldrums of Summer and Fall, the returns demonstrated in the model above will most likely not withstand the test of time. This model will most likely continue to outperform buy-and-hold because of seasonal cash flows, but not by the wide margin of the past.
The top chart shows the S&P 500 (blue), the corresponding S&P 500 with dividends reinvested (green), and the S&P 500, traded using the CrystalBull Calendar Model (yellow). It is assumed that, when out of the market, the Calendar Model earned a rate equivalent to the 3 Month CD rate.
Since 1970, a 'buy and hold' strategy has yielded a % Total Return (including dividends), while adherence to the CrystalBull Calendar Model for trading has yielded a % Total Return.
CLICK HERE to compare this timing model to theoretically-perfect timing models.
CrystalBull Calendar Indicator
( HINT: Click-and-drag left-to-right on a chart to zoom in to a specific date range. Double-click on a chart to zoom back out. )