Data &
Technology
Research
Reports
Report Solutions
Reports Library
Actionable
Strategies
Free
Resources
Simple Backtest Calculator
Simple Seasonality Calculator
The Kelly Criterion Calculator
Sentiment Geo Map
Public Research Reports
Free Webinar
Pricing
Company
About
Meet Our Team
In the News
Testimonials
Client Success Stories
Contact
Log inLoginSign up
< BACK TO ALL REPORTS

10 Reasons to Believe the Correction May Not Be Over Yet

Jay Kaeppel
2021-09-22
Seasonality is only one factor that influences the stock market. And no matter how reliable a given trend may have been in the past, there is never any guarantee that a given security, index, or sector will do "what it's supposed to do" the next time around. That said, many key stock market indexes and sectors have entered – or will soon enter – a period of significant seasonal weakness.

At this point, many investors are struggling to decide if they should (once again) "buy the dip" or if the investment landscape might finally have changed a bit from the "slow, steady, easy money" mode we have been in over the prior 18 months.

Seasonality is only one factor that influences the stock market. And no matter how reliable a given trend may have been in the past, there is never any guarantee that a given security, index, or sector will do "what it's supposed to do" the next time around. That said, several key stock market indexes and sectors have entered - or will soon enter - a period of significant seasonal weakness. 

The charts below will give you a general idea.

LARGE-CAP STOCKS: Ticker SPY (SPDR S&P 500 ETF Trust)

SMALL-CAP STOCKS: Ticker IWM (iShares Russell 2000 ETF)

EMERGING MARKETS: Ticker EEM (iShares MSCI Emerging Markets ETF)

REAL ESTATE SECTOR: Ticker IYR (iShares U.S. Real Estate ETF)

FINANCIAL SECTOR: Ticker XLF (Financial Select Sector SPDR Fund)

RETAILING SECTOR: Ticker XRT (SPDR S&P Retail ETF)

HOMEBUILDING SECTOR: Ticker XHB (SPDR S&P Homebuilders ETF)

ENERGY SECTOR: Ticker XLE (Energy Select Sector SPDR Fund)

METALS AND MINING SECTOR: Ticker XME (SPDR S&P Metals and Mining ETF)

BIOTECH SECTOR: Ticker IBB (iShares Biotechnology ETF)

SUMMARY

So do the charts above imply that the market is "doomed" to trade lower?  Not at all.  Year-to-year performance can be pretty random. Nevertheless, after ten consecutive months with higher closes by the major market indexes, a period of typical seasonal weakness may be as good a time as any to expect some consolidation at the very least.

Sorry, you don't have access to this report

Upgrade your subscription plan to get access
Go to Dasboard
DATA &
TECHnologies
IndicatorEdge
‍
BackTestEdge
‍
Other Tools
‍
DataEdge API
RESEARCH
reports
Research Solution
‍
Reports Library
‍
actionable
Strategies
Index Trading Strategies
‍
Smart Stock Scanner
‍
FREE
RESOUrCES
Simple Backtest
Calculator
Simple Seasonality
Calculator
The Kelly Criterion
Calculator
Sentiment Geo Map
‍
Public Research Reports
‍
Free Webinar
COMPANY
‍
About
‍
Meet our Team
‍
In the News
‍
Testimonials
‍
Client Success Stories
Pricing
Bundle pricing
‍
Announcements
‍
FAQ
Subscribe to SentimenTrader's free newsletter
Get weekly highlights from our expert analysis, product updates, exclusive promotions, and invaluable educational content straight to your inbox. Sign up today and elevate your investing knowledge.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
© 2024 Sundial Capital Research Inc. All rights reserved.
Setsail Marketing
TermsPrivacyAffiliate Program
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

Testimonial Disclosure: Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.