Since the end of the 3rd quarter, I have been reading about how out-performance in September has often led to “spectacular gains” in the 4th quarter. The mid-term election year effect apparently helps to boost these historical odds further still.
As I recall, most referred to statistics come from Bespoke, but many top notch blogs or sites have posted variations of these studies. In fact, I counted 7 top notch blogs/websites siting similar or a variation of the study. “Second tier” sites and social media like tweeter have also picked up on the theme.
Add to that sentiment is leaning bullish with the recent Tickersense poll over 60% bulls and AAII over 50% bulls, and I tend to take the contrarian view that we may rather have some pull backs soon (today’s big pop aside(. The current rally and the last rally in July measure about the same distance, so this view has some good a = c symmetry. We also have the McClellan Summation index that has rolled over showing growing divergences at the very least. The recent pattern has being 5 up weeks and 3 down weeks, will the pull back last until late October?
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