As we begin Q4 and your neighbors start putting up their $299, 12-foot skeletons from Home Depot, let’s all keep some critical market stats in mind.
Since the 1950s, the S&P 500 has posted gains in 80% of fourth quarters, averaging +4.2% returns.
That’s strong. Very strong.
But at the same time, we’ve historically seen some of the largest market pullbacks occur in the month of October.
October historically delivers some of the largest market pullbacks: the Bank Panic of 1907, Stock Market Crash of 1929, and Black Monday 1987.
Even Lehman Brothers collapsed just before October (September 15th, 2008).
So clearly, October is historically one of the most volatile months for the U.S. stock market.
Adding fuel to the fire, billionaire hedge fund manager Paul Tudor Jones just told CNBC that the ingredients are now in place for massive rally before a ‘blow off’ top to bull market.
It’s anyone’s guess as to the timing of all this, but it’s certainly something to consider as we head into the final stretch of the 2024 calendar year.
YOUR ACTION PLAN
Barron’s asks today “How much longer can the AI bubble last?” Well, if there’s ever been a month to get ready for a pullback, it’s right now.
In our trading services, we’ll be taking a strategically defensive position here in October – followed by a more aggressive position come November/December for an end-of-year run.
This will be a trend I’m keeping in mind as we begin October trading.