With Labor Day behind us we are now officially heading into the most turbulent period of the year. With 2020 being an election year that would apply politically as well as when it comes to participating in the financial markets. At least in the latter department – not a moment too soon. The big summer lull is by far my least favorite season and I’m looking forward to a bit more action and volatility – both realized and implied.
Week #36 started out bucking its seasonal trend. pretending it was going to be business as usual, but then suddenly rolled over and bitch slapped a legion of RobinHood bag holders who spent the weekend applying vaseline to their private parts.
After swinging for the fences the SPX finally recovered slightly below its lower expected move threshold. Coincidence? As always I think not.
Monsters of tech were hit particularly hard with volatility literally exploding overnight. You got to love low participation pre-holiday tape 🙂
So what does the future hold? Well I have good news and bad news for you.
The good news is that week #37 is the most positive of September and statistically we have a 60% probability of ending in the plus. The bad news is that September is a veritable turd historically speaking and you should be prepared for quite a bit of turbulence.
Weekly percent positive stats show us above the median at around 60% which are decent odds at the surface. However if we dig a bit deeper things get more problematic:
Please log in to your RPQ membership in order to view the rest of this post. Not a member yet? Click here to learn more about how Red Pill Quants can help you advance your trading to the next level.