The Countdown to October

I have to admit that time has cauterized my dread of Octobers somewhat.  Obviously, 2008 had a tumultuous October as every hedge fund and over-leveraged investor was forced to hit the bid, no matter how low that bid was, as they scrambled to go to cash.  October 1987 and October 2008 were the worst October routs we have been subjected to in our time, but not the only ones.

Today, we have a Psychology Composite reading of P4, but that slight negative is more than neutered by the extreme bullishness of our Monetary Composite at M2.  Our Asset Allocation Matrix, developed over many years of watching the ebbs and flows of markets, matches current readings on our Psychology and Monetary Composites, and holds our hands as we get into this often "rocky" period of October.  Our Matrix continues to tell us that this bull market is alive and well, but that P4 reading, along with our overbought oscillators, suggests that the next move on this market will be down for the short-term.

So, we don't expect this October to be very good, but with our Monetary Composite so positive, we also don't expect any calamities.

Don Hays

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