Novemeber is tracking the seasonal patterns very closely. We still expect a mild pullback early next week, but from then on we are likely to see post-Thanksgiving gains. Early December can be disappointing for bullish traders, but as Christmas approaches the bulls come back to the parade.
There are several market tendencies or historical biases that we highlight throughout the year. One historical tendency worth noting at this time of year is the “January Effect.” The “January Effect” refers to the tendency of small cap stocks (as a group) to outperform their large cap counterparts early in the calendar year.
Markets are up strongly since we turned bullish. We expect that momentum to continue after a mild pullback. Overbought signals are here.
November is generally a very good month for US stocks. However, in years preceeding US Presidential elections, November has not always shown a strong performance. This year, options expiration week comes early. Our calendar shows the dates investors need to watch.
Pending anymore tweets and geopolictical uphevals, we can expect the market to move higher toward the July highs until the last week of the September. Strong bullish market moves will likely remain elusive until November.
September’s markets can be much weaker than usual. Investors often looking to precious metals and bonds as areas of safety. Semiconductors are usually the weakest sector.
Markets traded significantly higher today on large volume. This signals a follow through day from last Monday’s lows. Caution is warrented when trading in summer months.
We review common measures of volatility, breadth, volume and investor setiment to determine how much more of a pullback the US markets might witness.
August has been the worst performing month of the year over the last 31 years. Money flows from harvesting made August a great stock market month in the first half of the Twentieth Century. It was the best month from 1901 to 1951. In 1900, 37.5% of the US population was farming. Now that less Read more ➝