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Bob Carey
Chief Market Strategist
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  Tis The Seasonality Trade In Technology
Posted Under: Sectors
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View from the Observation Deck

  1. Today's blog post is just a brief reminder of the potential for a seasonality trade in tech-related stocks heading into Q4.
  2. Two of the indices in the chart were up in 8 out of the past 10 fourth quarters. The S&P 500 Information Technology Index was up in 9 of the 10.
  3. The best Q4 return for the S&P 500 was in Q4'03, up 12.18%. The worst showing was in Q4'08 (financial crisis), down 21.94%.
  4. The best Q4 return for the S&P 500 Information Technology Index was in Q4'02, up 22.32%. The worst showing was in Q4'08 (financial crisis), down 25.73%.
  5. The best Q4 return for the DJ Internet Composite Index was in Q4'02, up 40.91%. The worst showing was in Q4'08 (financial crisis), down 25.39%.
  6. One of the potential boosts for tech-related companies in Q4 comes from IT spending. Managers have just three months left to spend their budgets. It is often a use it or lose it proposition.
  7. A second potential driver for business is the launch of new consumer electronics products to coincide with the holiday shopping season.   

Posted on Tuesday, October 2, 2012 @ 3:11 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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