August is typically a low volume trading month. The second half of the month being the worst. Most of Wall Street and Europe for that matter is on vacation. Fund Managers of all types are away from the computer screen. While on vacation, you can be sure many of the Fund Managers are weighing portfolio positions in their mind. Looking to trim some positions while adding to others.
After Labor day, the world's largest Fund Managers come back to work. It usually takes a week before volume returns to full steam. The first week back after Labor Day is a week for final research and market observation before many of the big portfolio adjustments start. So for those (like us) who are eager to get cracking after a nice vacation, don't expect too much increase in volume the first and second day back to work.
Everyone knows that October can be a volatile month as companies report their 3rd quarter earnings. Historically, September is the worst month as far a % gain for the month. Over the years, the month of September is on average a negative month. I believe that number is just around -1% on a historical average for the month of September.
We are hoping for a good month in Equities as the Big money seems to be rotating from Energy and Commodities to the Stock market once again. Maybe we can buck the historical trend of September this year. That being said, don't fight the trend.
Personally, I fear there may be another shoe to drop in the Financial markets. If that happens, the key will be observing how the market trades after any negative news. The last shoe to drop may already be priced in to this market. If not, buckle your seat belts.
September was among the worst performing months in all but one of the decades of the 20th century. Only between 1911 and 1920 was its performance above par, when its average performance for the decade came in second. Decade September's rank (1 best; 12 worst)
1901-1910 12
1911-1920 2
1921-1930 12
1931-1940 10
1941-1950 8
1951-1960 12
1961-1970 9
1971-1980 12
1981-1990 12
1991-2000 10
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