It is impossible to miss the headline news about the “typical” September stock market trend; happens every year. The real question everyone should be asking is, “Who cares that the September stock market trend isn’t historically good.”
Background of the September stock market trend
The history of September isn’t a pretty one leading Investopedia to label it the worst month of the year:
Since 1950, the month of September has seen an average decline in the Dow Jones Industrial (DJIA) of 1.1%, while the S&P has averaged a 0.7% decline during September. Since the NASDAQ was first established in in 1971, its composite index has fallen an average of 1% during September trading. This is, of course, only an average exhibited over many years, and September is certainly not the worst month of stock-market trading every year.
The flip-side of this general trend down is volatility typically increases. So we have to understand who is really impacted by this situation.
Historically, September has been the worst month for markets http://trib.al/Cdfw1r9 From @GlobeInvestorpic.twitter.com/KZOkj98Utm
The two types of people in the stock market
Let’s make this simple. There are two types of people in the stock market: Investors and Traders. If you are an investor, then September is likely a stressful month. Seeing portfolios decline and, more importantly, trying to ascertain if the balance of the year will hold good news. Traders, on the other hand, are a different breed. Like myself, they are intra-day or short term focused and the September stock market trend offers something to look forward to: volatility and profits.
This year is no different
The first trading day of September saw the DOW pluge 470 points with fingers pointing to China.
Wall Street kicked off September on a sharply negative note: http://fxn.ws/1VtjHMv pic.twitter.com/jFOXFxtJLl
Even the non mainstream press is publishing articles about the dire situation:
New month, same old negative, scary, correction-like price action on Wall Street: http://usat.ly/1EyPojc (epa photo)pic.twitter.com/xs5sbSbIO5
Therefore, my intra-day trading friends, welcome the September stock market trend and profit from it. One tool that can help you get each trading day started is my Traderfy Trend giving you an overview of the futures market trend. What are your thoughts about September? Let me know in the comments below.