Time to Sell Rosh Hashanah

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Our View

While things “held” together yesterday, Fed officials will be watching the jobs number closely as they contemplate the next move for monetary policy and interest rates. After the Fed cut rates by 0.50% in September, the CME Fed Funds are pointing to a 0.25% rate cut in November and a 0.50% cut in December. That is why Friday’s jobs number is so important. Economists predict the economy added 140,000 jobs in September, slightly below the 142,000 in August. Meanwhile, the unemployment rate is forecast to remain unchanged at 4.2%.

MiM and Daily Recap

The ES traded up to 5,763.50 and sold off down to 5,735.75 on Globex, opening Wednesday’s regular session at 5,749.75. After the open, the ES traded to 5,750.50 and then dropped down to 5,723.00 at 9:44. It then rallied 48 points up to 5,772.00 at 11:41 before selling off down to the 5,750.00 area at 1:33. The ES rallied up to the 5,766.00 area, then pulled back to 5,755.75 at 2:26, fell into a chop, and traded up to 5,766.75 at 3:45. It traded at 5,766.25 as the 3:50 showed $1.1 billion to buy, sold off down to 5,759.25 at 3:55, and then rallied up to 5,759.50 at the 4:00 cash close. After 4:00, the ES rallied up to 5,767.00 at 4:23, then slowly pulled back to 5,765.75, and settled at 5,765.75, up 10.25 points or +0.18%.

The NQ settled at 20,056.25, up +0.41%, the YM settled up 0.15%, and the RTY closed down 0.03% for the day.

Technical Edge

Daily:

Weekly:

Guest Posts: Dan@ GTC Traders

GTC Traders Portfolio Review: Macro Thoughts, Fixed Income, Long-Short Valuation Investing and Short-Term Trading

We will return next week to our discussion on Bubbles, and performance of trading, during a bubble.

But this week, we thought we would do something a little different for our guest post.

This is a portfolio review that we sent out this morning to Tier 1 and Tier 2 Members of GTC Traders. It describes our thoughts on both Inflation, Interest Rates, Middle-East Tensions, and how that translates into our own approach to the three strategies that we demonstrate (Equity Fixed Income, Valuation Long-Short Investing and Short-Term Trading).

You can find those thoughts in the following video entry …

Guest Post: Stock Trader’s Almanac

Time to Sell on Rosh Hashanah!

Happy New Year! The “Sell Rosh Hashanah, Buy Yom Kippur” strategy is set up again this year as the market comes under pressure following fresh highs and the best 9-month start since 1997. Factors such as uncertainty ahead of a tight presidential election race, heightened Middle East tensions, and dockworkers’ strikes are poised to exacerbate October’s historically volatile performance.

Key Dates:

Our statistics use the close of the day before each holiday.

October Volatility:

This period coincides with seasonal October weakness, especially during election years.

Thesis: Folks tend to sell positions on Rosh Hashanah, the first of the Days of Awe, to rid themselves of financial commitments. They then return to the market after Yom Kippur, the Day of Atonement. This behavior aligns with the historical trend of October volatility.

Additional Market Pressures:

Conclusion: Given these factors, the “Sell Rosh Hashanah, Buy Yom Kippur” strategy remains relevant. Traders and investors should be mindful of the historical trends and current market pressures as they navigate this volatile period.

Economic Calendar

Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.

Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!