StockTouch Blog

Why September is the worst month for the market

September 5, 2012 by Peter

The stock market certainly has it quirks. As we previously have written about there are many professional behavioral patterns that exist nowhere else but on Wall Street, just check out our previous post on “Sell in May and go away” . So again we bring you a brief seasonal update here for those who constantly try to pull logic or reason out of wonky Wall St behavior.  According to the Stock Traders Almanac September is the worst month of the year, but tends to start strong and end weak (via Stock Traders Almanac):

 Start of business year, end of vacations, and back to school made September a leading barometer month in first 60 years of 20th century, now portfolio managers back after Labor Day tend to clean house

 Biggest % loser on the S&P, Dow and NASDAQ

 Streak of four great Dow Septembers averaging 4.2% gains ended in 1999 with six losers in a row averaging –5.9%, up three straight 2005- 2007, down 6% in 2008

 Day after Labor Day Dow up 13 of last 16

 S&P opened strong 11 of last 15 years but tends to close weak due to end-of-quarter mutual fund portfolio restructuring, last trading day: S&P down 11 of past 17

 September Triple-Witching Week can be dangerous, week after is pitiful.

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