By Jeffrey Hirsch
Stock Trader's Almanac Investor
September is still the worst month of the year. (Over the last 15 years August is worse on the S&P). Post-election Septembers, though not the worst post-election year month, can be quite nasty. Nine of the last 13 post-election year Septembers took some rather mean hits.
The four gains were not without cause. The 1953 bear market ended in September. The 1973 downleg ended in August, but the Yom Kippur War, Watergate and the OPEC oil embargo forged a nasty bear market through 1973 and 1974. An acceleration of defense spending in September 1965 related to Vietnam created a bullish environment for stocks. President Clinton's signing of the capital gains tax cut into law in July 1997 helped boost stocks in September 1997, August and October were down 7.3% and 6.3% respectively.
The few positive tendencies of September such as the first trading day (Dow up 8 of last 10), the day after Labor Day (Dow up 9 of last 11. Off 4.1% 2002) and the Monday (Sept. 12) before Triple Witching (Dow up 15 of last 20) are offset by an abundance of hazards which shrouds the month, especially the second half. Triple Witching day (Sept. 16) Dow down 15 of the last 25 years. For the week after September Triple Witching the Dow has been down 12 of the last 15 and historically September has closed poorly. The end of the 3rd quarter brings portfolio window dressing and heavy selling.
Editor's Note: Jeffrey Hirsch is editor of the Stock Trader's Almanac Investor, 79 Main St., Ste. 3, Nyack, NY 10960, 1 year, 12 issues, $295. www.stocktradersalmanac.com.
