In a comment some months ago, I mentioned the Hallowe’en Effect, which is as predictable as the pirates and ghosts that demand treats at our doors on All Hallows' Eve. The reality of this phenomenon is that, effective November 1^st, stocks tend to go into a seasonal overdrive. It seems to me that, inasmuch as November is fast approaching, this tendency is worth another comment.

Take the case of UnitedHealth Group Inc., an American diversified managed health care company based in Minnetonka, Minnesota. It is 6th on the Fortune 500. As you will notice above, it recently rocketed up quite a bit, before a retracement over the last few days. Part of the reason is that numerous business magazines and websites began writing about it in response to its terrific financial report and outlook, reported mid-month. I bought some shares when the news came out.

If you look at the chart, you will notice that there is technical support at $US144, and in my view that is the short-term downside.

Or is it? The stock has roughly tripled in the last three years. Is that sustainable? If you buy the seasonality of the November Lift (it’s hard to argue that it doesn’t exist), you would be hanging onto this stock (and most of your other SPX stocks) as this phenomenon works its magic – on UNH, for example. Another area where this works is in gold shares.