In my August Monthly Outlook I stated that I was skeptical of the strong rally we saw in the stock market during July. That rally continued almost unabated during August. Right up until 8/15 when stocks hit their 200 day moving average and the 4,300 level on the S&P 500 (see black box). That level served as strong resistance, and as has happened multiple times this year, the gains in stocks stalled out at resistance and rolled over. Below is a chart showing this pattern. The big question right now is does the decline in stocks stop at support at 3,900 (see blue box) or does it fall all the way back to the mid-June low of 3,666.
Not only do we have to hold support but we are heading into a very weak month for stocks. The chart below shows that over the last 10 years, September has seen gains in stocks only 44% of the time.
Lastly we are heading into midterm elections. That has historically meant increased volatility in the financial markets. As such we remain neutrally positioned, holding more cash than usual until we get more confidence that the year-to-date downtrend has truly run its course.
September Calendar of Events (comments and additions for future months are always welcome)
- September is National Suicide Prevention month – let’s look out for friends and loved ones having a hard time in 2022
Sept 5th Labor Day
Sept 11th Patriot Day- honoring those who lost their lives on 9/11/01. It’s the 21st anniversary of that fateful day. Hard to believe.
Sept 22nd Autumn begins – let’s pray it doesn’t include another covid spike
Sept 25th Rosh Hashana begins – wishing all our family, friends, and colleagues of the Jewish faith Shanah tovah um’tukah
Sept 25th National Daughter’s Day – I will celebrate my 3 awesome daughters Satya, Ryan and Caryn and my 2 amazing granddaughters Isys & Naomi
Sept 29th National Coffee Day – one of my favorite days !
Sources: StockCharts.com
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