September Song

September is a fascinating month for the markets.

It is traditionally the worst month of the year. That is, over the past
60 years, if you had invested only in September, your return would be
lower than that of any other month. In fact, you would lose about .6%
EACH YEAR, on average.

Yet, over the last five years, September has been far more
promising. It had the second best monthly return both last year and over the
past three years. (One year = 3.5%) (Three years = 2.2% yearly)

So, we are now likely beginning to enter a positive season for the markets. The seasonally bullish season used to begin in mid October but now seems to begin as early as September.

That said, do you think we should hold on or use the upcoming rally (assuming that we see one this year) to exit the markets? Will we see another bear cycle next year? What are your thoughts?

Selling In A Bear Market

I think its fairly clear at this point that we are not only in a long term bear market, but that we will be moving lower from here, perhaps considerably lower. Note the two year head and shoulders formation that began in late 2006.





That said, due to seasonal and other factors, we'll likely be moving higher in the short term. Should the I fund reach the top of its current trend line, it would appear to be a good time to move to the sidelines. Otherwise, we continue to monitor the base and sell if it is breached.

What is your opinion of the state of the markets today?