July Seasonality.
I have mentioned ad-nauseam the comparison of the 1994 S&P 500 chart to the current chart. I bring it up again because if this pullback is going to mirror the 1994 pullback, it could mean we could see a bottom as early as the end of this week.
I know my indicators tend to be early if anything. But if the market does continue to pullback through Thursday or Friday, the short term indicators will find themselves very oversold. This coming Friday would be the 7th day of this pullback. On the 7th day of the 1994 pullback there was a nice reversal which ignited a decent rally that lasted for two months...
Chart provided courtesy of www.decisionpoint.com
With Friday being July 1st, we'll want to take a look at the July seasonality data...
Chart provided courtesy of www.sentimentrader.com
Yes, early July looks like a great time to be invested in stocks. But before we get too excited, we had a similar situation last year and the market tanked the first week of July 2004, with the S&P 500 falling from 1141 to 1109 (down 2.8%) in the first 5 days. So early July tends to be good but it is definitely no slam dunk.
There is a tendency for the market to go in one direction on the day The Fed announces an interest rate decision, then go in the opposite direction the following day. This Thursday is one of those days. If we can string a couple more bad days together, perhaps The Fed will ignite one more sell off on Thursday, paving the way for a possible entry day for Friday? This may be premature, and it is just conjecture at this point, but if the market does continue to fall into Thursday, I may be ready to jump back into stocks. For now it's wait and see.
We haven't seen any real signs of panic yet by options traders. That would be a big plus for the market but they are still hanging on to the bull market. Perhaps 2 to 4 more days of selling will help that situation?
That's all for today. Currently 100% G fund. Until next time....
Administrative Note: I have started the TSP Talk Weekly Sentiment Survey which will be a poll sent via email each Friday asking you one question; Are you bullish, bearish or neutral for the market in the coming week? If you want to be a part of this, click here ... Join the Weekly Sentiment Survey and input your email address. When the confirmation page comes up, there will be two boxes on the left side. One to join the Weekly Survey, and one to join the email alert list. Choose the box of the list you wish to be added to. If you are already on the email alert list, or you would like to be, you will need to check both the Email Alert and the Weekly Sentiment Survey box. Thanks!
I have mentioned ad-nauseam the comparison of the 1994 S&P 500 chart to the current chart. I bring it up again because if this pullback is going to mirror the 1994 pullback, it could mean we could see a bottom as early as the end of this week.
I know my indicators tend to be early if anything. But if the market does continue to pullback through Thursday or Friday, the short term indicators will find themselves very oversold. This coming Friday would be the 7th day of this pullback. On the 7th day of the 1994 pullback there was a nice reversal which ignited a decent rally that lasted for two months...
Chart provided courtesy of www.decisionpoint.com
With Friday being July 1st, we'll want to take a look at the July seasonality data...
Chart provided courtesy of www.sentimentrader.com
Yes, early July looks like a great time to be invested in stocks. But before we get too excited, we had a similar situation last year and the market tanked the first week of July 2004, with the S&P 500 falling from 1141 to 1109 (down 2.8%) in the first 5 days. So early July tends to be good but it is definitely no slam dunk.
There is a tendency for the market to go in one direction on the day The Fed announces an interest rate decision, then go in the opposite direction the following day. This Thursday is one of those days. If we can string a couple more bad days together, perhaps The Fed will ignite one more sell off on Thursday, paving the way for a possible entry day for Friday? This may be premature, and it is just conjecture at this point, but if the market does continue to fall into Thursday, I may be ready to jump back into stocks. For now it's wait and see.
We haven't seen any real signs of panic yet by options traders. That would be a big plus for the market but they are still hanging on to the bull market. Perhaps 2 to 4 more days of selling will help that situation?
That's all for today. Currently 100% G fund. Until next time....
Administrative Note: I have started the TSP Talk Weekly Sentiment Survey which will be a poll sent via email each Friday asking you one question; Are you bullish, bearish or neutral for the market in the coming week? If you want to be a part of this, click here ... Join the Weekly Sentiment Survey and input your email address. When the confirmation page comes up, there will be two boxes on the left side. One to join the Weekly Survey, and one to join the email alert list. Choose the box of the list you wish to be added to. If you are already on the email alert list, or you would like to be, you will need to check both the Email Alert and the Weekly Sentiment Survey box. Thanks!
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