Tough month. With August in the rear view mirror, hopes for a fresh start in September will be on the minds of many an investor after Labor Day. Historically however, September is not usually a time for nice rebounds. In fact, it is the worst month of all, and some traders see that trend continuing:
Redler said the market is lacking the normal dip buyers, who have been stepping into every shallow correction. “We put a pivot low in at (S&P) 1627. Some active guys will trade long against that. But if we get a break and close below that, the bears will be growling for the 200-day and a retest of the June lows which stand at 1560ish,” Redler noted.
Of course, prognosticators are nothing more than a common commodity on Wall Street, but there are certainly plenty of reasons for concern. In addition to the Syria mess, the debt ceiling will be looming over everything as congress gets back into Washington. Then there is the Fed. At the moment, September is being held up as the month that begins the infamous “tapering” project.
Some end of the month numbers are due today, most prominently regarding spending and income. With the GDP number being better than expected yesterday (though hardly terrific and prior quarters were revised down) Wall Street is looking hungrily at these numbers. (UPDATE: Numbers were a bit disappointing but no shockers).
Now she tells us — With an election looming in Germany there is suddenly some tough talk being thrown around:
“Greece shouldn’t have been allowed into the euro,” Ms Merkel told around 1,000 supporters of her Christian Democratic Union in Rendsburg on Tuesday.
“Chancellor Schroeder accepted Greece in [in 2001] and weakened the Stability Pact, and both decisions were fundamentally wrong, and one of the starting points for our current troubles.”
Let’s see, rail on an unpopular policy and simultaneously blame a prior administration for the situation. She seems to have politics down pat. But, so far the markets don’t appear to be taking her seriously as she has already been bailing out the Euro scofflaws and seems ready to do so again, once those pesky elections are over.
And Europe might be the least of the problems to look forward to this fall. China’s got its own debt problems, Japan’s money spigot is stubbornly not cooperating according to plan and India is on a razor’s edge economically speaking.
So, the markets will need to climb that proverbial wall of worry big time these coming weeks if it is going to have a good month. But it wouldn’t be the first time that all of the news seems dire and stocks went up, so it is hard to discount the possibility. In the meantime, there’s a three day weekend for investors and it is a much needed break. Enjoy your weekend and see you in September!
This article was first published on http://moneyprime.com.