Monday, September 17, 2012

Seasonality - Update

Credits: Mike Burk's Technical Market Comments
This week includes the 5 trading days prior to the 3rd Friday of September during the 4th year of the Presidential Cycle. 

Mike Burk's table at right shows the average daily return on a percentage basis (1956-2008) has been negative by all measures (prior to 1953 the market traded 6 days a week so that data has been ignored).

The seasonal pattern suggests
the major averages will be lower on Friday September 21 as well as a sharp decline over the next several weeks.

However, the question is: Will the QE3 hype continue? Can the S&P 500 keep going higher?

Yes, they can! In the SPX the downward move last Friday from 1474 to 1461 was clearly corrective, and a new high by Equinox (HERE & HERE) is very likely