September 17, 2021
Good morning,
It’s pretty quiet out there this morning following yesterday’s intraday selloff and rebound. Futures are off a smidge 60 min before the open with no economic data coming out before then. Note however, it is a quarterly option expiry day today and funny things can happen on triple witching days.
You may wonder why I keep chirping about the slog the stock market has endured all month and that most of the declines observed to date have been no big deal. I think it’s connected to the market pause-is-the-new-correction theory.
Data shows that September has tended to be the weakest month of the year. Yet with the month half over, the S&P 500 Index is only off 1.6% from its high (same for the global ACWI). Both indexes are slightly oversold, and sentiment is not too optimistic. Data also shows that since the early 2000’s, the fourth quarter is the strongest of the year. It could be that the market’s resilience in the face of the negative September seasonality is a preview of a bullish market response to favorable fourth quarter seasonal tendencies.
A little bullish from your fully invested Bear? Perhaps, but with all the pundits pounding the table for a 10%+ correction, you know my tendencies are contrarian. Have a great weekend.
Be well,
Mike