Today is the last day of the month and quarter. I know my readers are astute enough to know that we may see some “curious” action, especially late in the day. Portfolio games may be abound and they tend to get unwound over the next day or two. I know I say this all the time, but I can’t believe how fast the first three quarters flew by.
My grandmother was among the smartest people I ever knew. When I was a little kid she used to tell that the older you get, the faster time flies by. She would say that as I drew an “X” through the school calendar every day, looking forward to the academic year ending. She also would tell me that while I may not understand it, I shouldn’t let my youthful years go to waste. Of course, when she passed in her sleep at 99, she was still referring to me as “young”.
With October beginning tomorrow, I am going to share some seasonal stats. Most people view October as a really bad month to invest. They cite the crashes of 1929, 1987, 1997, 1998 and 2008 to name a few. The truth is that October is the bear killing month where we have seen more bear markets end than any other month. I don’t anyone who believes that stocks have been in a bear market although I am sure there are a few crack pots out there.
When October begins in a bull market like today, the first five days are super strong, averaging more than 0.50%. The first 10 days average +0.35% because the second five days are down by roughly 0.25%. The third and fourth weeks each average -0.25%. Overall, October in a bull market gives back -0.28% on average. In an election year, this is magnified.
Finally, long time readers know that we created a very robust, quantitative election model that has accurately predicted all elections this century and hasn’t been wrong since 1992. It simply uses three stock market time series along with recent economic data. The model is most accurate right before the election and I will share more as we get closer. If tomorrow was the election, it would predict a Harris victory.
On Friday we sold QQQW.
