Welcome to September. As per the WSJ:
The month of September is historically the weakest month of the year for the U.S. stock market. Investors shouldn’t sell based solely on the calendar, of course, but this seasonal quirk is another reason to be wary heading into what could be a busy month for traders.
The S&P 500 has averaged a monthly decline of 0.5% in September since 1950, according to the Stock Trader’s Almanac, by far the worst. June and August come in a distant second and third, averaging essentially flat long-term monthly performance.
On a somewhat related note, I poured through the charts of well over 1000 stocks last night & this morning, filling 2 pages on my scratchpad with about 150-200 of my favorite trade setups, both longs & shorts. I plan to spend most of the day culling that list down to a manageable number in order to post my top picks from that list as official & unofficial trade ideas over the next couple of weeks (with the timeliest & most promising trade ideas first).
Some of the sectors that stand out on the long side are energy, in particular the Oil & Gas Exploration & Production stocks as well as the precious metals mining sector although my list of long-side trade setups largely contains a mixed bag of individual stocks in various sectors. This reinforces the recent trend that I’ve noticed over the last year+ & I believe will continue to be the case going forward with individual security selection & sector rotation vastly outperforming the broad market.
Some of the more promising sectors setting up on the short side are insurance companies, investment brokers, medical device companies (very much individual stock specific vs. the entire sector), biotechnology (yes, despite the recent rip a correction now appears imminent), casinos & a few others. Those are just some of the sectors that stand out but the individual setups on my list span numerous sectors & industries, even some commodities whereas the outlook on other commodities appears bullish.
I will check in to the trading room occasional throughout the day but my primary focus will be updating the existing trade ideas, as there are several that need to be moved from the Active Trades to the Completed Trades category, in order to make room for some new trade setups.