The Weakest Week Of The Weakest Month Playing Out
On Monday I wrote that this week was the weakest week of the weakest month of the year. Contrary to what we heard from the media and pundits at the end of August about September, I thought this seasonal trend had a good chance to play out because few people were discussing it. Furthermore, I read an additional study which I wasn’t able to verify until today that showed this and next week being down 90%+ of the time. Again, these trends are headwinds and tailwinds to pair with other things not as standalone triggers.
Sentiment leading up to this week’s all-time high has become frothy, meaning that investors are giddy, greedy and confident. You could even say that they are at bull market ending levels. However, bull markets don’t die just because people are bragging at cocktail parties and make stupid investing decisions. And we know they do not die of old age. They typically die because of mistakes and a deteriorating foundation which we do not have today.
In simplest terms bull markets do not die when semis and banks look powerful.
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We know the stock market has seen a very mild pullback. And it could last longer. However, weakness remains a buying opportunity until proven otherwise.
On Monday we bought OIH and more PINK. We sold QLD, RSSE, PCY and some XLC. On Tuesday we bought XLP and SSO. We sold CWB and some IGV. On Wednesday we bought QLD and more MQQQ.
More By This Author:
The Weakest Week Of The Weakest Month Is Here
Powell Moves As Expected – Small Caps Continue To Rip
Markets Stronger Than Expected
Disclosure: Please see HC’s full disclosure here.
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