by Jason Bodner
September 4, 2024
The August run of market manipulation is over. Labor Day is here. As I write, the world is quiet…
Late August finds much of the tri-state area* on vacation. Hey, if you can’t take some time off around Labor Day, when can you? Labor Day also marks the start of the NFL season. 99.4% of the time the NFL plays the first official game on the Thursday after Labor Day, and the jobs report comes out the next day.
*The tri-state area – New York, Connecticut, and New Jersey – is home to many financial professionals. Traders, portfolio managers, and every other role related to the investment world need a break. During the week before Labor Day, it is a safe bet that most trading desks are staffed with a skeleton crew.
Empty offices mean low liquidity, potentially more volatility and possibly some trading shenanigans. I think it’s no coincidence that a popular stock saw a short-seller report come out last week, of all weeks. The volatility experienced in the aftermath was amplified due to low market participation (few buyers).
It’s hard to put much stake in trading action during the last week of August. That’s why I think it’s a good time to reflect on where we are by looking at historical analogs to give us an idea of where we are headed.
First, let’s look at where we are; then I will show you some compelling data that layers even more positives for the bullish case through the end of the year and beyond.
Looking at the Big Money Index (BMI), we see that it held stable after that nasty selloff in the first week of August. If anything, it is looking to break above recent highs made in July. Remember – that amber line is a 25-day moving average of unusual money flows. When it rises, that means money is moving into the market. So, despite the massive head-fake in the first week of August, money kept moving into stocks.
The post 9-4-24: August is Mercifully Over – Will Market Return to Reality? appeared first on Navellier.
