Here's why the market's 'Octoberphobia' selling could soon give way to a new rally

• Stocks have seen some of their worst selloffs in October, and this year may end up being no different.
• The crash of 1929 came during October, as did the 1987 crash, the stock market sell-offs of 1978 and 1979; Friday the 13th in 1989, and the painful 733 point drop on Oct. 15, 2008.
• According to 'Stock Traders Almanac,' there have also been big turnarounds in October, particularly in midterm election years.

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This October is living up to its reputation as being one of the most violent, scary months for stocks, but "Octoberphobia' can also give way to a turnaround, particularly in a midterm election year.

Stocks have been punished since the month began, with the worst two days of selling — Wednesday and Thursday — driving the Dow down a total 1,300 points. So far for this month, the Dow is down 4.2 percent; the is down 5 percent, and the Nasdaq is down 6.8 percent.

Stock Traders Almanac says the crash of 1929 came during so-called Octoberphobia, as did the 1987 crash, the stock market sell-offs of 1978 and 1979; Friday the 13th in 1989, and the painful 733 point drop on Oct. 15, 2008. The worst weekly decline was the week ending Oct. 10, 2008, when the Dow lost 18.2 percent or 1,874 points during the thick of the financial crisis.

"It's not over yet, and October is not over yet," said Jeffrey Hirsch, editor-in-chief of Stock Traders Almanac. "Everyone was pretty convinced that 'sell in May' was dead this year. Well, they forgot about October," Hirsch said.

Stocks bounced on Friday, after sharp sell-offs Wednesday and Thursday that wiped out more than 1,300 Dow points. The Dow rose 287 points on Friday, finishing the week at 25,339, down 4.2 percent for the five-day period

But Octobers have also been a time of turnaround, with 12 post World War II bear markets ending in October, including the most recent, 1987, 1998, 2001, 2002 and 2011.

Eight of the 12 were midterm bottoms. "Midterm election years Octobers are downright stellar thanks to the major turnarounds," noted Hirsch.

'These things always surprise everybody or else they wouldn't look like this," he said. "It's not unprecedented..It's definitely something that could easily turn around."

The October period is the beginning of what Stock Traders Almanac calls a "sweet spot," the three quarter period that includes the fourth quarter of midterm year and the first and second quarter of the pre-presidential election year. The Dow averages gains of 20.4 percent in those periods and the S&P is up an average 21 percent.