“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.”
-Mark Twain
Good morning,
This Wednesday marks not just the beginning of a potential government shutdown, but the first day of October.
Seasonally, October has something for everyone when it comes to the stock market, and while Mark Twain’s famous quote doesn’t quite ring true when digging into the numbers, October has been a famously volatile, from market crashes to major market bottoms.
This week, I want to take a special dive into seasonality. We’ll look at seasonal tendencies from everything from gold to Bitcoin to bond yields, but equities are my primary focus.
While it might seem easy to mock the seasonals this year, given the S&P 500’s incredibly strong summer, as we showed last week, under the surface, things really have cooled off since mid-July.
But that means as the calendar turns bullish, we should see breadth improve.
Seasonality is a secondary input at best. Only price pays. But it’s when the seasonal tendencies don’t work that can be the signal. So we’ll be watching for participation to improve over the next four weeks.
Today’s report will review:
Key levels on Bitcoin and major equity indexes
Weak breadth
4 “canaries” to watch
Seasonality for gold, fixed income, and Bitcoin
Gold and gold miners
The technical setup for oil and energy stocks
and more!
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