MLR - PMP 9/8/14

Published : September 8 2014 at 8:35 ET

Major averages rose Friday on lower volume. While the month of September had typically spelled more trouble for the market going back more than 100 years, QE has changed this as markets tend to push higher in relentless baby stepping fashion. Since 2009 when QE began, QE 1, 2, and 3 have pushed markets higher.

Here is how QE 1, 2, or 3 affected the market the month of September:

Sept 2009 - QE1 on. Market up.
Sept 2010 - QE2 on. Market up.
Sept 2011 - QE2 had ended. Market down for September.
Sept 2012 - Operation Twist on. Market up.
Sept 2013 - QE3 on. Market up.

So as you can see, in every year where QE 1, 2, or 3 was on, September was up. This flies in the face of September months going back 100 years where September was clearly the worst performing month. In fact, it was the only month over this lengthy timeframe that was appreciably lower while all other months were, on average, up at least a small amount. If one accounts for the fact that the market has changed since the market top in March 2000, one still can observe September being one of the three worst performing months with June and August being the other two.

The number of pocket pivot and buyable gap up reports we sent to members last week continues to show a number of actionable stocks. So should September be another up month as QE3 remains on, this should bode well for such stocks. That said, those who have done well this year take their profits when they have them in context, of course, with the overall chart. And sell stops are kept tighter than normal so losses are smaller when they do occur. Thus the winners tend to more than outweigh the losers, and over time, one's profit can grow, even if in baby step or bunny hop fashion. 

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