There is a well-known seasonality in stock market performance. It is one that records poor performance during the late summer, early fall period of August and September. Certainly this seasonality is not hard and fast, but appears frequently enough to be of note. There are many explanations put forth as to why this exists. Some have to do with fiscal year ends for many mutual funds about this time. Another explanation is psychology, based upon some coincidental events in the past such as several October crashes.
So, what about this year?
Wouldn’t it be surprising if when everyone fears a certain event the opposite happens? Not really, this is a norm for mass investor behavior and stock market action. As many investors fear this time of year, we are recording break-outs in positive money flows into certain sectors of the stock market. These are good indicators to near-term positive results. So, we have good reason to expect a strong market during this perceived weak period; stay steady my friends!
The Lonely Bull