Lest we forget
Lest we forget. A term used in my homeland to honor and remember those who made the ultimate sacrifice. 20 years on from the Terrorist Attacks on our country, I feel it’s appropriate to use, not only for those who lost their lives that day, but for the families whose lives changed forever.
Anything but Seasonal
We’ve all heard the saying “sell in May and go away”, (a term phrased back in England as a time when most traders left their desks and went on summer vacations, which also happened to coincided with the Horse Racing schedule), is meant to tell you trading volumes will diminish through these times and as such, don’t expect the stock market to give you much as far as return goes. This year has not followed the traditional run.
Although April has been the best month so far this year, the traditional slow months (May-September) have thus far given much better than average returns.
There are a few ways to look at this…Later months of the year are traditionally strong following the mid-year weakness, there is a ramp up in activity towards year end as everyone wants to lock in profits, or you could always go with the traders are now back from gambling on horses. Whatever your take on it is, this year is different.
As we now come to the middle of September, we are basically flat for the month (at the time of writing 9/9/21), and I do feel like this (shorter term) run, is getting a little long in the tooth. My dilemma at this point is to decide from a macro point whether the run we have had will influence the market to not follow the traditional seasonal pattern.
To this extent I will look at the charts. Big picture the market seems to be trading in a pretty tight pattern since Covid. This is normal for early stage (as discussed last week), shorter term we can see firstly a gap between the 5 and 20 day moving average. (Side note: Most look at the 50-day moving average vs. the 200-day, I prefer to shorten it up to 5/20) and we are also seeing signs of some internal weakness with the % of stocks above their 50-day moving average pulling back. When this happens, it can signal a vulnerability for a pullback.
So, my take for now is to strategically build up some cash by trimming out of those names that have run a long way and are at highs against their 50-day moving average. I’m going to replace my old saying of “were not trying to knock it out of the park, just hit singles” with “yards are hard but inches are cinches”.
Health, Wealth, Family, Fun, Serve
Down under, the first Sunday in September is Father’s Day. It also falls pretty close to my Dad’s birthday. In that light I thought I’d share this pic of us on top of the Sydney Harbor Bridge. As you can see, it’s a pretty old picture, but it is my favorite. I’m guessing this was around 1997ish. This is before the tourist attraction it is today, where you need to sit through a 2-hour class and rope off to each other and the railing. Back then I had a “mate” that was a maintenance manager on the bridge, and he said sure, go on up.
Anyway, Happy Father’s Day/Birthday Mate.
Mick Graham, CPM®, AIF®
Financial Advisor/Branch Manager Raymond James Melbourne, FL
This case study is for illustrative purposes only. Individual cases will vary. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Prior to making any investment decision, you should consult with your financial advisor about your individual situation.