Bearish reversal turns Equity trend bearish into October Array ( [cookie] => c85018-9dae20-eb73e5-6121b5-22543d [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 1 [max_usage_crypto] => 1 [lock] => 1 [message] => [error] => [active_member] => 1 [subscriber] => 0 [role] => fsi_pro [visitor_id] => 563296 [reason] => [method] => ) 1
Tuesday’s selloff looks important and negative technically, and likely jumpstarts the decline into early October. The abrupt reversal post CPI happened in one fell swoop early Tuesday, erasing gains of the last few days, coinciding directly with the bearish seasonal trends which normally cause September trading peaks near the eighth trading day of the month in mid-term election years. Selling pressure in Equities also looks to be coinciding with a US Dollar and Treasury yield rally, as well as Cryptocurrency decline. All these sudden reversals likely could persist into early October but should ultimately pave the way for higher prices in Q4 given how bearish sentiment has become in recent weeks. Overall, while pinpointing an exact low in price is difficult without time lining up, this could prove exact if markets sell off into early October. The 8/16-9/6 decline could be equaled in price and time down near 3680 into October 5-7, so this might be an initial of price and time to watch carefully. Cycle composites also agree with a possible early October low, which would equate to around three weeks of selling pressure. Allocations to cash and/or defensive positioning look right until October.
Mid-term Election year seasonality turns down this week
While most understand mid-term election year seasonality to be negative in September, averaging -0.90% vs. an average -0.70% in most Septembers, I thought it might be worthwhile to share how the average September stacks up throughout the month.
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