September is historically the worst performing month of the year. According to the Stock Trader’s Almanac, the average September return since 1950 is -0.8% for the Dow and -0.5% on the S&P 500. September is the only month that has had more down than up years. Last year, the S&P 500 dropped more than 7% in September.
But another factoid worth noting is that over the past 25 years when the first trading day in September was a loser, the entire month showed a positive return only 27% of the time.
During the month, at its worst the S&P averaged a loss of -6.2%, while at its best it averaged a paltry gain of only +1.0%. When September started with a gain, then the entire month was positive 49% of the time, with a maximum loss that averaged -2.0% versus a maximum gain that averaged +3.1%.
Either way, it doesn’t look good for the bulls in September.
Editor and Chief Options Strategist