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    Volatility Reports October 31, 2022

    October 31, 2022

October 31, 2022

Volatility Reports October 31, 2022

All the talk is about the profit season from now until the end of May, before summer vacation. Hence the cliche is to sell stocks in May and buy them back in October.

My system development firm Thinking Man’s Trader (TMT) programmed that idea and tested it and since the 1920s on the Dow, it works. The drawdowns are larger than most want to endure, but in general, it works.

Be that as it may, here is a small sampling of the content regarding this seasonal factor.

“The next six months have been higher 18 of the past 18 times during a midterm year. Yes, things have been tough this year so far, but be open to better times. What happened in the rearview mirror doesn’t mean it’ll happen again.”  From a broker that appears on CNBC.

“Of the 11 S&P 500 Sectors. 8 are now above their June lows. ” From a CPA?

“This is the 4th time in 2022 that $SPX rallied 7% or more in only 9 sessions. How are we feeling about this one? 4th time the charm?”  A CMT.

$SPY $IWM +8% this month”  from a CFA chasing the equity curve. 

We’re at a point in the calendar where $SPX returns tend to have a clear upward bias, but that bias is further enhanced when sentiment is overly bearish. One of the risks is that offsides positioning develops into FOMO as the year draws to a close.”  A Research Firm

The sentiment remains bullish and bearish on bonds and not much talk about commodities.

Well chatting with a number of bulls in the public space they all believe that the market has experienced a bear market, which is over. While my expectation is the bear is not over but thus far, it has not been confirmed. Like everything that makes TMA rough for the many, by the price and time comes that the bear is confirmed, it will be too late for the perma-bulls.

I put it this way, “From the ATH the decline has only been a correction, not a bear market. There is more to a bear than a 21% decline with the average time from high to low. The nature of a bear is very clear and undeniable, and what has unfolded thus far is not a bear market, maybe the bull’s egos are a little touchy. They are certainly defensive worrying about their jobs. But so far, not a bear market, it is a ‘bull market in fear.'”

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