End / Beginning of the Month

[tsptalk]

It's been a pretty consistent trend lately to see the market move in one direction into the end of the month, and almost immediately go the other way when the new month starts. Not every month, but 8 of the last 12, including 4 in a row.

We have also talked about the pre / post holiday reversal tendency.

But there is another trend that I am very aware of, and that is that every time I point out a trend, it ends!

 

[Intrepid_Timer]

As my readers are fully aware, this has happened the past five Julys also. I posted this on the returns of the S fund in July in my commentary on Tuesday:

In 2006, it rose 6.45% from June 20th to July 3rd. It then fell 7.09% by July 21st before going back up the rest of the month. July finished down 2.79% that year.
In 2007, it rose 4.43% from June 26th to July 13th. It then fell 7.50% by the end of the month. July finished down 4.57% that year.
In 2008, it fell 8.69% from June 25th to July 15th. It then rose 5.22% by the end of the month. July finished down 0.77% that year.
In 2009, it rose 5.72% from June 23rd to July 1st. It then fell 6.62% by July 8th before rising 15.22% by the end of the month. July finished up 8.66% that year.
In 2010, it fell 7.15% from June 25th to July 6th. It then rose 8.14% by the 13th. After that, it fell 3.47% by the 21st before rising another 4.80% by the end of the month. July finished up 6.98% that year.
As you can see, although there is no real pattern here, the S fund does have a tendency to reverse whatever it is doing going into July and can do so in dramatic fashion.

The hard part is determining how soon the reversal happens..............

 

[Scout333]

It's been a pretty consistent trend lately to see the market move in one direction into the end of the month, and almost immediately go the other way when the new month starts. Not every month, but 8 of the last 12, including 4 in a row.

We have also talked about the pre / post holiday reversal tendency.

But there is another trend that I am very aware of, and that is that every time I point out a trend, it ends!

I know, me too! Every time I think I have figured out a trend it reverses direction. I'm considering pulling out of equities for the time being. But unsure whether to get out today due to light trade volume and end of quarter window dressing push up or ride it out through the middle of next month? The unknown is the effect of the debt ceiling debate and ultimate conclusion. More than likely it will be resolved but if not could be tragic! In the 10 to 20% range tragic.

 

[tsptalk]

Here's 2009 - 2010 (June - July)...

 

[tsptalk]

As my readers are fully aware, this has happened the past five Julys also. I posted this on the returns of the S fund in July in my commentary on Tuesday:

Those are some wild swings. I think if this rally hadn't moved above the 50-day EMA it would be a no-brainer sell signal, but with the technical breakout, buyers will probably be more willing to step up - particularly those who have missed the move. Of course that is also a good contrarian sell signal. Maybe I will just wait to see what the next I_T signal says. That makes it a lot easier.

 

[Intrepid_Timer]

Those are some wild swings. I think if this rally hadn't moved above the 50-day EMA it would be a no-brainer sell signal, but with the technical breakout, buyers will probably be more willing to step up - particularly those who have missed the move. Of course that is also a good contrarian sell signal. Maybe I will just wait to see what the next I_T signal says. That makes it a lot easier.

Being the site owner does have it's perks doesn't it........