Friday, August 27, 2010

Chart of the Day - September is the worst month for stocks

Our Year 2010 plan has been since January to look for a high in May and maybe August, then a low going into October or November. That was based partly on the so-called Presidential Cycle and also on Terry Laundry's T Theory plus projections of Raymond Merriman and others. Now we see comments from the folks at Chart of the Day saying that September tends to be a poor month. While that isn't always true, there's enough data behind it to support swing positions remaining cashed out or possibly short (against either 1130 or maybe 1100 $SPX for example). You can see the data also support the so-called "Santa rally" going up into the end of December, so do think in terms of covering or buying long into a low perhaps for an October low that we sure hope to identify. So - take a look at what "Chart of the Day" is showing:


Except for a brief counter-trend rally in July, the stock market has struggled since peaking in late April. Investors are concerned. For some perspective, today's chart presents the Dow's average performance for each calendar month since 1950. As today's chart illustrates, it is not unusual for the stock market to underperform during the May to October time frame with a brief counter-trend rally occurring in July. It is worth noting that the worst calendar month for stock market performance (i.e. September) is fast approaching.

- Where's the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron's recommended charts ofChart of the Day Plus.

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Quote of the Day
"The average pencil is seven inches long, with just a half-inch eraser - in case you thought optimism was dead." - Robert Brault

Events of the Day
August 30, 2010 - US Open tennis tournament begins (ends September 12th)
September 06, 2010 - Labor Day

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