Strong Months Are Ahead. Now’s the Time to Prepare.

[TradeSmith Power Trends logo] [TradeSmith Power Trends logo] September 12, 2024 Strong Months Are Ahead. Now’s the Time to Prepare. Welcome to the worst month of the year. Sure, we have football back on our screens, the summer heat is starting to melt away (if you’re lucky), and September is the month with the most babies born. I love kids and have three of my own, so that’s a huge positive for me. Okay, so maybe September isn’t so bad. Let me rephrase that. Welcome to the worst month of the year… for stocks. At least historically speaking. Wall Street is on vacation, trading desks are staffed by “B” teams, and it’s generally a miserable month of shenanigans and volatility. This year, the market wasted no time to lead us into another expectedly toxic September. Here we see the first three days of the month for the four major index tracking ETFs: [chart]( Source: Tiingo Talk about a killjoy, right? That’s not my nature. I decided long ago that life is too short to be constantly negative, but that doesn’t mean unrealistic optimism untethered from reality. We do have to face the facts. As we kick off September, I admit it can be easy to feel a little pessimistic knowing this month’s historical pattern. And this year, we add an election fraught with anxiety and uncertainty that follows only a few weeks after the month concludes. Last week the S&P 500 had its worst week since early 2023, mostly due to inflation fears coming back into focus causing the size of interest rate cuts to once again become murky. But in typical volatile fashion, stocks rebounded on Monday: The S&P 500 climbed 0.7%, the Dow Jones Industrial Average jumped 0.6%, and the Nasdaq led the charge with a roughly 0.9% gain. Welcome to a bumpy ride. It may come as a surprise, though, that September historically being the worst month is actually more of a 50/50 toss-up. 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Investing in securities carries a high degree of risk; you may lose some or all of the investment. What’s Really Going On? Take a look at Septembers going back to 1990. Out of 34, it’s nearly a push whether the market turns sour or not: [chart]( Source: FactSet That’s because of just a few rough years that have spoiled that historical data. If you removed 2000 to 2002, Septembers would actually be flat… and that’s leaving in the disastrous 2008 Great Financial Crisis. So, which way will this year go? We are still in the first half and need to wait and see, but there are a few things to keep in mind: - Even if it’s around 50/50 in terms of absolute returns, seasonality still says we should expect a bumpy month. - We are on the precipice of some potentially significant policy changes from the Federal Reserve, which could amp up volatility. - We are in a Presidential election year. The mudslinging will intensify and so too should the market’s reactions to an uncertain outcome. Remember, though, that September brings babies, football, and more bearable temperatures. And regardless of how this year’s coin toss ends up, it also brings in the strongest months of the year… and those odds are a lot more than just 50/50. If we do the same exercise as above for October, November, and December, we see something very cool… October is positive 63% of the time, November is positive 73.5% of the time, and December is positive 72.1% of the time. Those odds look much better, and I recommend [getting prepared now to take full advantage](. Don’t Be Scared, Be Prepared Frankly, investors who are constantly negative on stocks miss a lot of incredible opportunities. I know it’s hard to not be a little pessimistic during these rocky summer months, but when we focus on the historical data, we can be prepared. We know that August and September are historically weak, while October through December bring us the strongest quarter of the year: [chart]( Source: MAPsignals.com If you’re nervous about buying or holding stocks right now, focus on the absolute best in the market – the ones with less risk and a bigger shot at profits. I built my whole [Quantum Edge system]( to find those exact stocks with the characteristics that indicate higher prices ahead. Those that can weather the tougher months and shoot higher into the stronger ones. And those stocks that outperform the market 7-to-1, as shown by years of use and back testing. On any given day, fewer than 1% of stocks make it through my system to even be considered a possible recommendation for my [Quantum Edge Pro subscribers](. These are shares of companies that have superior fundamentals… the best in the business. They also have strong technicals. They are stocks that are already on the move, which is better than trying to predict a bottom or a turnaround. And here’s the real kicker: [Big Money is buying these stocks](. I’m talking the really big money. The type of money that moves stocks. That’s why I designed my Quantum Edge system… to track these massive amounts of money right down to the ticker symbol. That’s the trifecta of high-probability investing and what I base all of my stock recommendations on: super strong fundamentals and technicals combined with green lights showing Big Money is buying in. [Find stocks with those factors]( and you have a good chance of making it through the volatile months and making good money. Talk soon, [Jason Bodner signature] [Jason Bodner signature] Jason Bodner Editor, Jason Bodner’s Power Trends © 2024 TradeSmith, LLC. All Rights Reserved. P.O. Box 340087 Tampa, FL 33694 To unsubscribe or change your email preferences, please [click here](. [Terms of use]( | [Privacy Policy](