It is said that history doesn’t repeat, but that it often rhymes. And based on my experience, this is certainly true in the stock market. It is this very concept that is behind the study of seasonality on Wall Street. As we’ve discussed a time or twenty in this space, historical cycles in the stock market tend to be pretty powerful. Generally speaking, stocks largely follow a seasonal pattern – well, except when they don’t, of course!

This year is an example of when traders simply ignored the seasonal tendencies and went a different direction. As in the polar opposite direction, that is. Instead of the meaningful correction that was projected to occur between August through October (a decline that might wipe out the year’s gains), investors looked ahead to better days for the economy and earnings, as well as the good stuff from tax reform, and powered the U.S. stock market to a series of new all-time highs.

The question, of course, is if the positive seasonal cycles that tend to occur at this time of year are still on the table. In other words, if the meaningful decline didn’t happen during the fall, can we really expect the traditional year-end rally to materialize? Or will the market just continue to go the other way and make a complete mockery of the seasonal cycles?

For answers to this question, I turned to the computers at Ned Davis Research. Here’s what I learned…

First, we need to recognize that this year’s “fall correction” (if you can call the decline of 2.2% that occurred in mid-August a correction) was one of the smallest on record. In fact, this year’s “fall pullback,” which have averaged -9.9% since 1928 (as defined by the total decline seen on the S&P 500 between July 31 and October 31 during calendar years), was the sixth smallest seen in history. You have to go back to 2006 to find a smaller decline (-1.5%) and back to 1968 before that.

The point should be clear. Despite the fact that the fall pullbacks have been pretty small over the last two years doesn’t overshadow the fact that declines of less than 5% during the August – October period are rare.