Hi Folks!
I just wanted to give a quick update on some market observations I've made over the weekend, how the Art of Trading private group has been navigating recent volatility and what to potentially watch for next! Lets get started!
Historically speaking the 4th quarter of each year in the market on average is strong for stocks. Here are the S&P 500 stats since 1950.
October: Closed up 45 years with only 28 down years. Average return +0.79%
November: Closed up 49 years with only 24 down years. Average return +1.54%
December: Closed up 54 years with only 23 down years. Average return +1.31%
So far for the month of October the S&P 500 is down -3.74%. More so the S&P 500 is now down -10.29% off of July highs. The index is +8.66% YTD
Another additional important observation is the S&P 500 has now closed down 3 consecutive months since August, (assuming the index closes down again in October)
The S&P 500 hasn't closed down 4 consecutive months in a row since August of 2011. Its an uncommon occurrence historically.
This is how the S&P 500 chart has developed over the past 18 months. Note the area of resistance From May 2022 into May 2023. Could this area turn into a new spot for support?
Upcoming market earnings reports and catalysts for the week ahead:
FOMC reports out Wednesday afternoon 2PM EST
$AMD reports earnings on Tuesday after the close.
$AAPL reports earnings on Thursday after the the close.
Looking at NASDAQ the index has made a series of lower since mid July highs, piercing through 13000 level support on Wednesday of last week.
While NASDAQ has been creating a series of lower highs. $NAMO and $NYMO have developed a series of higher lows. A very important development!
Through this market weakness $VIX has been steadily rising. Making short term swing trading a more difficult environment to manage.
Art of Trading private members have been managing 1 - 2 positions at a time and we have been sure to stay nimble. Many times selling half of the trade on strength to book gains and to manage short term risk.
Since early August the group has taken 31 new trades. Both long and short.
Here are the results: (25% position size - $100k model account) Common shares:
Staying open minded and nimble will surely be important short term. Making sure not to become overly bearish or bullish. Support could be brewing in indexes based off of current technicals discussed earlier in the blog! Watch for FOMC, $AMD and $AAPL earnings this week!
Cheers and happy trading!
Art of Trading
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