Last year we went up 10.9% in October, following a tough summer. Over the past several months, the S&P has plodded along, almost methodically, 1-2.5% higher every month without volatility. The theme for 2012, thus far, has been “volatility compression.” Central banks have succeeded in succoring the insecurities of equity investors through grift. Because of the nature of this unbelievable melt up, many are waiting for the hammer to drop, wishcasting for it to be blunt.
On paper, October is the second best trading month of the year, second only to April, sporting a 68% win rate for the S&P. While it’s true, the month of October is most readily known for its flamboyantly gay market crashes and subsequent Louis Rukeyser specials. It’s also fact that the true nature of the market for the month of October is of supreme bullishness.
Based upon seasonality, which happens to be a fond novelty hobby of mine, certain stocks stand out in the month of October, such as FFIV, GPS, MAKO, even ERX. There is a full report inside of The PPT, for those who are interested. We have a working seasonality engine there for your most hedonistic desires.
In short, the market looks and smells like shit. But we have winds behind our sails, courtesy of the Fed, ECB and the seemingly never-ending walk higher–which has devastated purveyors of VXX.
50 Responses to What to Expect From the Markets in October
Hey Fly, you still long OSG and SVU?
Good Q moolah.
The ATR on $SVU inched by winced tight in range ’till Q3′s end, but is now teasing at a drop.
Not known for penny trading, opportunity costs are casting doubts for me, too, on that position.
“Investing” is for dead and dying wheelchair fuckers.
This is a bot market (no grift).
One must play fast to get pay.
I am playing things a bit conservative here (no prom queen) so in my opinion I am betting with the Fly and holding SVU here. It is real fucking boring to watch, but sometimes you need patience. As to OSG, also in my opinion it’s far more explosive (obviously) I’m holding that one and watching it very closely…
“On paper, October is the second best trading month of the year, second only to April, sporting a 68% win rate for the S&P.”
October has been the 2nd best in the last how many years? The last 5 years, the last 100 years, or the last 30?
I am going back 25 years. Anything more than that is ridiculous and irrelevant.
An old timer market hack I know is advising his fixed income folks to go from 25% equity 75% bonds to 100% bonds. The risk takers are advised to pull out at a moments notice while staying 100% long for now. This guy has been a bull for years so maybe he smells the same thing you do.
Two New BUYS…You know where you can find them…
Will you be doing a power point presentation momentarily?
With lasers and a smoke machine…makes sure you get a good seat
How about leg lifts? Will you demonstrate to the audience how to properly lift 1,500 lbs?
I’ll assume you meant Leg Press…Which all depends on the sled…otherwise i can come by you…we can get a 12′ long 2×10 and I can leg ress a dozen mexican lawn guys
If you think that’s impressive you should check out The V.Kingdom Blog….Voted 5 Stars by Internet Traders Magazine
Bullshit. Internet Traders Magazine only goes up to 4 stars.
You’re right I got 4 stars from them…I was thinking about Market Movers Digest…
That’s too bad. Market Movers Digest goes up to 10 stars.
VXX going to ZERO?
If you went to work every day and sold VXX short, in 30 years, you’d be a billionaire.
You’d have to work for the full 30 years because a billion in 30 years might buy you a cheeseburger and a diet coke.
Do you still feel that OSG can get to $10.00?
isnt a small position in VXX a reasonable insure against a down market?? I mean LONG the market..but a small VXX is a good insurance policy is it not??
No, VXX is a flawed product. If you want a hedge, you’re better off with TZA or HDGE
always learning something…..can you give me a brief reason (because I trust your opinion) why VXX is flawed??
Just look at the chart. I once lost $5 million in a VXX trade gone bad. I have vast experience in trading it and it never follows the VIX correctly.
You are better off outright short, than betting on a volatility event.
thanks FLY…I know youre busy!!
The actual reason that VXX doesn’t track VIX is because the VIX is not a tradable security, but rather just a calculation of SPX vol. The VXX buys VIX futures. When VIX futures are in contango, that is, when further out expirations are more costly, the VXX fund has to keep paying more when they roll each month (selling cheap and buying high). This has been written about extensively. Anyone who is still going to hold VXX anyway, for longer than a quick trade, should really consider booking the next flight to Oregon (one-way) to see Dr. K.
But… tm… I must say, Dr. K will be starring at a theatre (sic) near you in 2014.
But for it will be one Dr. Kawalala on a “professional” visa from a 3rd world nation like lalapalooza. Said Dr. will be there to infuckto patients.
You watch. The Dutch Euthanasia touch in full session.
Todays traid paid for this weeks groceries. It was too easy, I’m staying away. This market sucks donkey dick.
After watching that GMO movie that Fly linked to, I freaked out and bought all organic at the grocery store. Ended up costing 50% more than a usual trip.
Worth the price.
I’m picking up some $CROX when it breaches the $16 floor.
Any day now.
Play Hard…Finish Strong! V.King 10:31
What size tee-shirt and color Sur Platonic Plateau Du Tecnocrats, B.R.A., D.J.D. upon Rookness?
The Color of Kings; naturally, red and white.
Also. Yep. XXX-L.
I’ll commence growth of mullet as I type as I will rock said V.Kingdom $hirt at Newport Coast’s Fashion Island in Eurocash (sic) style.
the urinal shadows see dark clouds ahead
too much protein
Noooooooooooooooooo! NOT the cute deer/antelope family!!!!!!!!!!!!
………’least it was organic. :”’(
fucking einhorn is retarded…People who eat Chipolte will switch to taco bell…REALLY? REALLY? Great thesis fuck tard!
I agree. But Einhorn is rarely wrong on his shorts.
I agree I usually wouldnt ever think about going long any stock he shorts. He is a smart man but this thesis is soooo weak. The way CMG has been beat up lately makes me wanna strap on my helmet and buy a bunch.
A day of divergences.
$$ to be made on days like this.
Just bought some etfs (to dump later as a daytrade).
SMH (chips),KRE regional banks),ITB (homies).
I believe the last 25 years of October have been so good is because at the end of the month there have been strong rallies off Sept-Oct crashes and downdrafts.
wish I had the balls to trade. Good luck sire!
BX is in the house…V.King fact …V.King family is related to Jonas Bronck…(do the homework fuck-o’s)
We are falling apart and can’t go any higher.. Stocks are acting horribly.
We are likely going down.