Breakout

Fasten Your Seatbelts Investors, It’s September

Breakout

As we unofficially close the books on summer and get settled back into our regular routines again, it's important to remember that, historically speaking, the next four weeks are likely to be a little be rough.

How rough? Well, Jeff Hirsch of the Stock Trader's Almanac had this to say on his Facebook page about September - which, by the way, is statistically the worst month of the year:

Although the month has opened strong 12 of the last 16 years, once tans begin to fade and the new school year begins, fund managers tend to clean house as the end of the third quarter approaches, causing some nasty sell-offs near month-end over the years.

In fact, 60 years of almanac analysis pegs the average September decline at -0.5% for the S&P 500 and -0.8% for the Dow Industrials. The worst September came in 1974 when the S&P 500 fell 11.9%, while the best monthly gain was posted just two years ago when the index rose 8.8%.

For traders like Keith Bliss, a Senior Vice President at Cuttone & Co. based at the the New York Stock Exchange, this year the ninth month will be best split in two.

"In the first part of September it will be all central bank action," Bliss predicts in the attached video, adding that "the second part of September will clearly be politics and gauging which way the presidential election is going to go."

As much as October crashes stand out in our minds, he says the odds show that September is really the month to keep an eye on. While an outright up-or-down call is tough to make, Bliss says he's sure we'll see more volume and more volatility than we have all summer now that the troops are back to work so to speak.

"Even though people are making money and they're able to trade in the market, the volume is a concern but I think it will come back in September, and that will give us more reason to believe any moves, up or down."

How confident are you feeling about this final leg of the third quarter? Let us know on our Facebook page.

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