What Do The Cycles Say About October?

By Dave & Donald Moenning, StartoftheMarkets.com

Based on the trading action yesterday, it appears that traders have moved into a schizophrenic mode as Tuesday's gains were reversed quickly at the open on Wednesday.

At issue is the simple fact that no one really knows what to expect in terms of the duration of the government shutdown. And, the bottom line is markets hate uncertainty.

Optimism Fading Fast

At least part of Tuesday's advance was based on the idea that the government shutdowns since 1980 have not produced large sell-offs in the stock marketĀ  While the algorithms have been trained to react at the speed of light to any and all headlines coming out of Washington D.C., reports made the rounds yesterday that historically, stocks have managed to advance the vast majority of the time (ten out of eleven occurrences) in the two weeks following a government shutdown. Continue reading "What Do The Cycles Say About October?"