Investors are entering a historically weak period for the market after last month's strong performance. Their troubles may not stop there. On top of June ranking as the fourth-worst month on average for the S & P 500, per Stock Trader's Almanac data, BTIG pointed out that high-beta momentum stocks have gained 42% over the past nine weeks to record levels. That sort of strength has only been seen two other times: November 1999 and January 2021. High-beta stocks are those that are generally more volatile than the broader market. "To be fair, from Nov. '99 into the final peak in March '00, high-beta momentum gained another 90%, and from Jan. '21 into the Feb. '21 peak it gained another 26%. However, all of those gains were quickly given back in the ensuing months," chief market technician Jonathan Krinsky wrote to clients. "We would caution chasing further strength high-beta momentum into June," he added. High-beta momentum stocks aren't the only ones soaring of late. The S & P 500 climbed 5% in May, topping 7,500 for the first time, as investors grew bullish on the artificial intelligence trade and began pricing in a resolution to the U.S.-Iran war. Tech led those gains , with the sector surging 15.9% while Nvidia popped 5.8% and Advanced Micro Devices rallied 45.6%. Seasonal headwinds, however, could at least pause the broader market's run. The S & P 500 averages a pedestrian 0.2% advance in June, Almanac data shows. In midterm election years, it performs even worse — losing 2.1% on average. Krinsky also pointed out that long/short momentum has fallen in six of the past nine Junes. "While much of the June weakness is due to strength in low momentum rather than weakness in high-mo, the extreme nature of high-mo continues to suggest caution especially when we have the VIX at 15, and divergences popping up," he wrote.
<small>Source: CNBC</small>
