August was a tough month but what's next for the markets?
August 2013 may be a down month for the markets. But Augusts aren’t generally great; historically, it’s usually about flat. While September has been the toughest month for markets on average, will this time be different?
Investors in the S&P 500 index did not have a happy month. They lost 3.1% and, for the entire summer, the index was a money-loser. From Memorial Day until Labor Day, the S&P fell about 0.5%.
Sure, consumer discretionary stocks in the S&P 500 index are up 1.6% since the last days of May, led by GameStop (up 56%), Best Buy (up 39%), and Goodyear (up 38%). But that wasn’t enough to save the S&P 500 from a bad season. Telecom stocks were a heavy drag and index stocks in that sector; they’re down more than 8% since Memorial Day. Some of the worst performers there were Centurylink (down 11%), AT&T (down 8%), and Verizon (also down about 8%).
And, it’s not just the S&P 500 that’s down. The more popularly-followed Dow Jones Industrial Average also had a bad August, down 4.5% for the month and down 3.25% for the summer. On the other hand, the tech-heavy NASDAQ Composite Index might be nearly flat for August but it’s up almost 4% for the summer.
Since the start of the 1970s, Septembers are down months for the S&P 500, averaging -0.52%. So, what technical levels for the index should we be on the lookout for in the weeks and months ahead?
Jeff Weiss, Chief Technical Analyst at Tejas Securities Group, examines the charts on the S&P 500. Weiss says we are now near key technical levels that have their roots from the start of the millennium.
Watch the video above to see what levels we’re testing and where Weiss thinks the market will go in both the near- and long-term.