S&P 500 Falls 5% in September

September is historically the weakest month of the year for the S&P 500 and we saw that trend play out again this year.

The S&P 500 (SPY) fell 5%.
The tech-heavy NASDAQ 100 (QQQ) fell 6%.

Despite the seasonal weakness, U.S. stocks are still having a good year. The S&P 500 is up 11% on the year and the NASDAQ is still up 33%. And looking forward I am expecting more gains in the fourth quarter because of two potential catalysts.

Stocks are Moving into a Seasonally Strong Time of the Year

The S&P 500 is about to move into a seasonally strong time of the year. October, November, December and January are historically four of the strongest months of the year for stocks.Take a look below at this very informative chart for a closer look at this seasonal trend.

Weakness in August and September Could Trigger More Gains

In addition to potential seasonal strength, the weakness stocks just saw in August and September has historically led to strong gains in the fourth quarter. Take a look at this cool chart from Carson Research with more details on this trend.

I View Weakness in Stocks as a Chance to Deploy Cash: I’ve been saying this a lot lately, but I view weakness in stocks as an opportunity to deploy cash. That’s what I’ve been doing for the last few months and I expect that to pay off in the fourth quarter. I’ll be back with another update next week – have a great day!

Disclaimer: This report is for entertainment purposes only. Every investor should consult with an investment advisor before making investment decisions. The Vodicka Group, Inc. is not a broker/dealer. We do not receive compensation for mentioning stocks. At various times, the clients, publishers and employees of Vodicka Group, Inc., may buy or sell the securities discussed for purposes of investment or trading..


Michael Vodicka

Michael Vodicka is the president and founder of the Vodicka Group Inc., a licensed investment advisor (Series 65) and a financial journalist.