Market Light Weekly Update September 5th, 2017: Try to Remember the Kind of September…

John Dupriest Market Light

Wonderful lyrics. Wonderful song: “Try to remember the kind of September when life was slow and oh, so mellow. … Try to remember when life was so tender that no one wept except the willow …”

 

The song is from the 1960’s play The Fantasticks. It is a haunting play – and song – about times past when things were sweeter and we were “a young and callow fellow.” Well, that’s in the rearview mirror. And so is August, which saw the Dow rise a mere 57 pts. But life is poetic – September is the month fall begins and sure enough, the Dow had fallen midday by 270 pts. Historically, September has been the worst performing month for the S&P, the Dow, and the NASDAQ. Thanks to Dorsey Wright, below is a table of historical September returns by asset class. You can see that while there are many months the statistics do not hold up (no pun intended), on average each of the listed classes drops. But not by much. It will bear (again, no pun intended .. well maybe a little) so we’ll see how the month plays out with the first serious trading day of the month down appreciably. To quote from another September song (September Song), “it’s a long, long way from May to December and the days grow short when you reach September, and the days dwindle down to a precious few …”  We will see just how dwindly this September becomes (if at all).

 

 

 

 

The Market Light remains Orange – Cautious and Deteriorating though it looked last week like a turnaround was close at hand. Last week the Dow finished up 173 pts and was looking good. Today, not so much.

 

The past week’s strong relative strength performers included Rare Earth Metals (REMX), Lithium (LIT), Copper (JJC), Base Metals (DBB), and Biotech (FBT). On the slower end of things, Oil & Gas Services (XES), Natural Gas (FCG), Livestock (COW), Regional Banks (IAT), and Retail (XRT) led the dash to the door.

 

The Technical Tea Leaves are flummoxed, finding a brew of neither fish nor fowl. “The 21 day stochastic has declined below the 80% line.  The price phase indicator is decreasing. In the current sideways market, this is a weak bearish signal indicating a possible decline in  short term price movements.”