September Effect

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As you know from the weekly webinars, September is generally a poor month. Often price will move down and this can best be seen on the Nasdaq which has benefited the most since the March lows.

Nasdaq Sep 08 2020

After every big move, we will see a pullback or consolidation and more so now do we want this to be the case.

Nasdaq has moved up about 75% since March and it needs to catch its breath before it can move up longer term.

While having a pullback or consolidation will generally not be a popular choice with many during bull runs, we really do want to see September play out with price taking a rest so that it can continue its longer-term journey after some tree shaking to lighten the load.

We are looking for opportunities but waiting to see if the market first takes this rest before committing more funds.

If we do have a breather, the market is likely to find more strength from that point towards December, assuming a Santa Claus rally.

So, don’t rush for new trades and wait to see if we have a pullback/consolidation then we can consider entering new pilot positions.

Let’s go trade!