Seasonality Tailwinds:

We know markets tend to look ahead 6 months out generally. But as we look below at the seasonality chart of the XLV, just entering March, starting in April is easily the best 4 month period for the ETF. The XLV is now in correction mode down 10% from most recent 52 week highs, of course not being immune from the recent market turmoil. It did show signs of weakening a few weeks back with a 5.1% combined drop the 2 weeks ending between 1/24-31, both accompanied by above average weekly volume. Looking back at the history of the XLV on its WEEKLY chart, there is a case for a bit of optimism. Big WEEKLY drops often exhaust themselves after a couple weeks. The last 2 significant drawdowns were in 2018, with a combined drop of 10.6% the 2 weeks ending between 2/2-9, and a 14.4% decline the 3 weeks ending between 12/7-21/18. Both of those instances held their lows for the most part before rallying weeks later. Seasonality suggests it may do the same again soon, but let the bulls are bears fight it out this month, before the benign April-July time period plays out. 

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