FWIW: DrBob recently commented on not taking seasonal patterns too seriously. One seasonal pattern frequently quoted is September being the worst month of the year and October being not far behind. Here is a comment on that via Don Hays - www.haysmarketfocus.com.
<<So, here’s another big piece of positive historical patterns. We have been
conditioned to believe that October is the hideous month that we have to crawl in
our hole and try to avoid. That is based upon several of the big crashes in
history occurring in that month. But that is not true. In fact, it is exactly the
opposite. When you look at the months of the year and the performance of the
S&P 500 in those months during the last ten years (since 1992) you find the
following performance.
January 1.53%
February 0.63%
March 1.44%
April 1.44%
May 0.98%
June 1.57%
July 0.77%
August (0.91)%
September 1.11%
October 1.85%
November 1.50%
December 1.80%
I'm indebted to Jason Trennert of Ed Hyman’s ISI group for this historical
comparison. But you can see that August, this month is where the damage has
traditionally been done. That actually leads to the next five months with
enormous upside bias. Thanks Jason, I needed that.>>
I think the reason for October looking so good the past 10 years is due to bottoms being reached in September or early October. If 1987's crash of Oct 22(?) were part of the 10-year period, October would not look so good.
Here's another point of interest - also via Don Hays:
<< I also find another report that has been forwarded to me from Smith Barney. I’m
not sure who the author was, since I only received a snippet. But this report
points out that as the bears keep focusing on the high debt and low savings level
of the public, there is now $2.1 trillion dollars parked in money market funds.
This is up $400 billion in the last year alone. When you put that in percentage
terms, that is the equivalent of 19.3% as a percentage of the value of U.S.
equities—by far the highest of the last 50 years. At the bottom of the 1990
recession that statistic reached a high of 16.7%. At the bottom of the super-cycle
bull market in 1982, it had made its previous all-time record high of 19%. Guess
what will happen to that money that is now receiving a 3% or less return, (going
lower in my opinion) as soon as some catalyst comes along to make them feel
more secure?>> |
