Sept. is historically the worst performing month for the U.S. stock market, and October is the worst performing month during Presidential election years. So far the S&P has performed surprisingly strong throughout Sept despite a very strong selloff during the first week of Sept. This bullish price action is fueled by a soft landing narrative with QE on the horizon. The Sept monthly candle is currently green, and this week’s price action will determine if Sept closes red or green. Bulls are continuing to show strength, and there is the possibility of a push up to resistance levels around $580. Bears are trying to push the price down as well, which has caused the past 2 days to result in neutral price action with gaps in both directions. The stock market is undecided for a direction here. I think the likely scenario is a move up to $580 before some downside in October. The monthly candle close will be interesting to watch, bears would ideally want a strong week of downside to close the month of September red.
TrendSpider published this market breadth analysis on their Twitter page. The best time to short the S&P is when the breadth is in the red zone, which is currently where we are. However, I think there is still room for some more upside to the upper end of the red zone. The best time to close shorts and go long is in the green zone. The Fed pivot is a new factor to consider and the trend is likely to change over the next few months.
S&P Remains Neutral
SPY continues to trade sideways with little gains in either direction.T he price action has been neutral for the past 2 trading days, which is signaling some uncertainty about the short term future. I think SPY continues to trade sideways here until the market finds a direction.
Pretty boring day for the stock market as well. The S&P continues to trade sideways with no clear direction. This is now the 3rd day of sideways price action, hopefully we’ll see some more exciting price movements as we approach the Sept. monthly candle close.
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