• Study of the Week: A September to Remember?

    by  • September 18, 2013 2:16 pm • Breaking News, Broad Market Analysis, Quick Hits, Study of the Week • 4 Comments

    Coming into September the consensus was we were due for a big drop.  I’m serious nearly no one was bullish.  Funny thing about that, September is off to one of its best starts in 40 years.

    Hopefully you listened to us here at Schaeffer’s, as we were all over the media noting why we could see a surprise rally.  Joe Bell, Todd Salamone, and myself all were on various networks looking for a surprise September rally.  The big question now is can we expect this to continue?

    I discussed this with the Wall Street Journal earlier today and in short, it looks like this rally could still frustrate the bears.  After 11 trading days in September, the SPX has been up 10 of them.  Going back 40 years, this is the first time September has ever seen this.

    Again, when you consider all the ’87 crash calls, September worries, and Syria concerns we saw at the end of August and early September, it is amazing how wrong so many were.  When there is that much worry, that makes expectations much lower.  In other words, the bar is set very low and if the worst doesn’t happen, big rallies can take place.  Exactly what we’ve seen so far in September.

    Next, we looked at all months and found there have been just five other months that started off this strong, up 10 of the first 11 days.  What is incredible here is the rest of the month was higher five out of five times after such strong starts.  In fact, it is up more than 2% on average!

    So there you go.  As most studies usually conclude, strength begets strength.  This study does little to dispel that.

    About

    Ryan Detrick is the Senior Technical Strategist at Schaeffer's Investment Research in Cincinnati, Ohio. He joined Schaeffer’s in 2003 and is a frequent speaker and writer on stock market and economic issues and is widely sought after by financial media for his expertise and commentary. Mr. Detrick is a common guest on CNBC, Fox Business, and Bloomberg Television and has been quoted in outlets such as The Wall Street Journal, BusinessWeek, USA Today, Reuters, the Associated Press, and others. With a decade of financial industry experience in the investment and financial services area, strengths include short-term trading with an eye toward timely technical- and sentiment-based trading opportunities, and advanced option trading strategies. Mr. Detrick received a BA in finance from Xavier University, an MBA in finance from Miami University, and has earned his Chartered Market Technician (CMT).

    http://schaefferstradingfloor.com/

    4 Responses to Study of the Week: A September to Remember?

    1. bb06
      September 19, 2013 2:44 pm at 2:44 pm

      Ryan can you push the data out to 18 days…TIA

      • Ryan Detrick, CMT
        September 19, 2013 3:32 pm at 3:32 pm

        Hi, thanks for the request.

        I’m not sure I understand – as there have been just 11 trading days (at time of study) … not 18 days.

        • bb06
          September 19, 2013 4:31 pm at 4:31 pm

          my mistake…”11 trading days”…regardless I appreciate your insight and so far you are correct in your call and hopefully will continue to be so.

          • Ryan Detrick, CMT
            September 20, 2013 10:19 am at 10:19 am

            No problem. Trust me, if I know where it’ll be in 18 days I’d own a small island right now!

            Take care.

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