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To: drangundsturm

“We are going into what are historically the two months most likely to crash, sep and oct...”

Historical moves in the market based on time of year, with no other drivers (e.g. year tax sales), are absolutely meaningless.


71 posted on 09/01/2010 7:49:00 AM PDT by coaltrain
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To: coaltrain
Historical moves in the market based on time of year, with no other drivers (e.g. year tax sales), are absolutely meaningless.

Yes and no. First, there ARE tax year seasonal portfolio adjustments in sep and oct, and this year because the LTCG rate might go higher this will plausibly be intensified. Secondly, strong historical month-based patterns, even if they were caused randomly, still cause a psychological effect for those people who follow that kind of trend, and a psychological effect can trigger a real market effect by influencing trading decisions.

75 posted on 09/01/2010 8:04:38 AM PDT by drangundsturm
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