Investors are biting their nails about what September will bring — but they may not need to worry just yet. The S & P 500 has fallen 0.7% on average in September, making it the worst month of the year historically, according to the Stock Trader’s Almanac. However, multiple Wall Street firms have pointed out that the seasonal weakness is more prevalent in the back half of the month. “On average, it’s the back-half of the month that tends to show weakness,” Jonathan Krinsky, BTIG’s chief market technician, wrote in a weekend note to clients. Case-in-point: Goldman Sachs pointed out that the second-half of September is, on average, the worst two-week period of the year. This year, the back said the period will be particularly interesting given that systematic support has seemingly “dried up,” with institutional investors net selling U.S. equities for two months in a row. One silver lining Goldman found is that positioning remains historically modest, which can keep any market dips light as long as fundamental shocks can be avoided. “We expect this month to be challenging and driven by active stock-picking on the institutional level while retail continues to direct flows into passive funds,” Goldman wrote. .SPX 3M mountain S & P 500, 3 months This seasonal period comes as investors wonder what’s next for a market that appears to be priced to perfection. While BTIG’s Krinsky said there are reasons for “caution” into the new trading month, he said bulls will keep control of the market if the S & P 500 can hold above 6,400. If the benchmark index falls below that, it could test the 6,100 to 6,200 range. It didn’t take long for that milestone to enter the fray. The S & P 500 on Tuesday traded around 6,390 in late morning trading. Still, the broad index is coming off a hot streak. The S & P 500 has risen for the last four months and is up more than 8% on the year.
September has a bad reputation. It’s the back half of month traders need to worry about
