Another up month for stocks in October....

Discussion in 'Trading' started by S2007S, Oct 2, 2010.

  1. S2007S

    S2007S

    Seems as though at this point an overbought market just becomes even more overbought. cnbc likes to publish this historical data and find out the smallest clues as to why the markets will be up yet again october. I find it amusing to see such bullishness day in and day out, it seems anytime the market is in this rally mode nothing can stop it. It also seems that price targets keep moving higher and higher as if there are more than a hundred different catalysts to support such rallies moving forward, which there aren't any more. Maybe just bubble ben bernanke feeding the markets worthless monopoly dollars day in and day out along with plenty of manipulation by the bots and high frequency traders which make up over 60% of the market volume on daily basis. Going to be an interesting month ahead.



    After a Hot September, Will the Markets Be Up in October?
    Published: Friday, 1 Oct 2010 | 11:06 AM ET
    Text Size
    By: Giovanny Moreano
    Quantitative Analyst


    Following the best September in 71 years for stocks, will the markets continue trending up?

    Here is a look at how the major US averages performed after a positive September.

    S&P 500 [.SPX 1146.24 5.04 (+0.44%) ]

    * In the past 30 years, the S&P closed up in September 14 times, or 47% of the time
    * Of the 14 instances that the S&P was positive in September, the index followed with a gain in October 9 times, or 64% of the time
    * The average gain in October when September was positive stands at 1.64%
    * The biggest gain in October following a positive September was recorded on 1982, when the index rose 11.04


    [​IMG]






    Dow [.DJI 10829.68 41.63 (+0.39%) ]

    * In the past 61 years, the Dow closed up in September 24 times, or 39% of the time
    * Of the 24 instances that the Dow was positive in September, the index followed with a gain in October 13 times, or 54% of the time
    * The average gain in October when September was positive stands at 0.53%
    * The biggest gain in October following a positive September was recorded in 1998, when the index rose 9.56%


    [​IMG]


    NASDAQ Composite [COMP 2370.75 2.13 (+0.09%) ]

    * In the past 22 years, the NASDAQ closed up in September 14 times, or 64% of the time
    * Of the 14 instances that the NASDAQ was positive in September, the index followed with a gain in October 8 times, or 57% of the time
    * The average gain in October when September was positive stands at 1.16%
    * The biggest gain in October following a positive September was recorded in 1999, when the index rose 8.02%


    [​IMG]
     
  2. I wouldn't make too much of this. Either the sample sizes are too small, or the results ("54% of the time") aren't convincing.

    In addition, when rallies are purely central bank-based and go against fundamentals and technicals (e.g., U.S. in 2007, Japan since 1990), it never ends well...