The next couple months could get shaky. Historically the worst two months for the S&P 500 during an election year, based on the last 25 years of data. In September, the S&P 500 has had just a 33% win rate, with an average return of -2.95%. October looks even worse, with only a 17% win rate and an average return of -3.62%. Interestingly, this follows a typically strong August, where the index has ended in the green with a 100% win rate.
Last 25 years worth - elections, at least Presidential ones, are every 4 years? But I do agree with the premise a correction is likely in the next 60 days, and a impetus might just be Sept 18-22 time period = Fed Day and Fall Equinox +/- a day lands on a Sunday (but very often a turn date).
First Interest Rate cut is expected on 18 September. The same Day Trump is sentenced. Mark that in your Diary, just Incase Powell or the sentencing Judge has a bad Day.
.25 cut is what markets expect. If they dont cut markets will be quite surprised! As for the trump news, means nothing for the markets!
The V force in this market has never been stronger. If you look at the monthly chart, you will see one of the most amazing tails/stick saves ever for August. So we are stuck in a powerful uptrend that CAN'T break. There is just no way this market can fall. Every time it attempts to it is immediately bought back up. I see a month of more extreme rallying and some aggressive V shape recoveries for every down move. I don't see how it ever can be stopped. Market is making multiple ATH the next few months. We had 2 attempts in April and July to bring the market down and it just led to 2 rapid V recoveries. It is over for bears in this market. Any time you get a decent red day, you have to expect the V the following days. THEY JUST CANNOT EVER KEEP THIS MARKET DOWN!
This is what I got from Google Lens: August must be the "never short a dull market" since wall streeters go on vacation. I guess when they sober up they start selling. So the expected loss for the next 2 months is -2% for September & -3% for October. Here is the monthly expected return for every month sequentially: Jan -0.6327% Feb -0.1026% Mar 0.4275% Apr 0.4773% May 0.7242% Jun 0.2272% Jul 0.5016% Aug 2.77% Sep -1.9765% Oct -3.0046% Nov 0.5427% Dec 0.9296% Just avoid Jan, Feb, Sept & Oct on election years and you should have a good risk-adjusted return.
There haven't been a September in 23 years which didn't retrace at least 40 % of the August range. The last 4 prior years were all red - taking out the prior month low - with an average change of - 5.72 %. Will this year be different? I don't know, but there's enough data to support some good short plays coming up. NQ's been a laggard on this recent leg higher, too. The perfect play would be a weak rally into NFP on Thursday to kick off the anticipated September sell. Might not get even that.