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Market Watch Weekly | September 3, 2021 | Goodbye Summer. Hello Pumpkin Spice Everything.

Erik Dekker - Sep 03, 2021
Despite a bit of weakness on Friday it was yet another record-setting week for major North American benchmarks. A weaker than expected US jobs report Friday morning did little to unnerve a market that’s starting September much the same way...

Despite a bit of weakness on Friday it was yet another record-setting week for major North American benchmarks. A weaker than expected US jobs report Friday morning did little to unnerve a market that’s starting September much the same way it’s started the seven prior months; Higher. For those market historians out there: Since the SPX became a 500-stock index in 1957, there have been 13 positive streaks of seven or more months (Figure 1). Therefore, we would make the following observations from the close of the seventh month:

  • The SPX normally continued its monthly string to at least 8 months. The streak ended at 7 months 38% of the time (5/13).
  • Only two instances saw no drawdown at some point following the close of the 7th month, so one could have bought the market a little cheaper 84.6% of the time. The median maximum decline from the 7th-month close was 3.11% over 17 trading days, and it is important to note the worst decline from the end of the 7th month was 6.35%.
  • And this is the most important bullet: Each instance saw a higher price following 7th-month over the next six months, with a median gain of 10.82% to six-month peak.

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