First, I sold my few remaining mo-mo stocks on the bounce this morning. Just booked the gains (and a few losses) and moving to cash for now. Most of them broke down yesterday. After the bounce this morning, most continued to break down. Despite what the index showed today, there was more fugly action out there in the small caps and mo-mo names. Overall, new lows outpaced new highs. Decliners lead advancers. Etc. - Now all this being said, we are heading towards the end of July and early August, which should see 401(k) adds automatically thrown at stocks. And Norm Fosback's seasonal method would have us getting long on at the close of friday July 27th, and riding it through the close on Aug 7th.
- Afterhours looks good with Apple's earnings. We'll see if the bulls can take the momentum past the opening hour.
- I was searching The Google for the "worst month of the year for stocks" and found this from CNN's money site:
For the last 18 years, August has been the worst month of the year for the S&P 500, and the second worst month for the Dow industrials and the Nasdaq composite, according to the Stock Trader's Almanac.
Go back further and it's not much better: since 1950, August has been the third worst month of the year for both the Dow and S&P 500 and September has been the worst. That's been true for the Nasdaq as well, since its inception in 1971, according to the Almanac.
The third quarter is typically the worst because of what might be called "the Hamptons effect," meaning, hey, it's summer, and bulls would rather be on the beach than making big changes to their portfolios. Summertime also often is a time many companies reassess the earnings outlook for the rest of the year, which also can pressure stocks.
- There is no guarantee that history will repeat. The column above was from July 2006. And despite the gloomy outlook at the time, the market has been what *almost* looks like a straight ramp up since.
- MSN says September is the worst month for stocks.
- This one from Reuters says watch out for September and October.
- The Sacramento Bee (via Sign On San Diego) says it's September.
- Investopedia says September, maybe because of folks back from vacation selling stocks and that mutual fund managers are selling losers in the portfolio before the end of the fiscal year end.
- For England's FTSE 100? September.