Why The Time To Step In And Buy Stocks Is Quickly Approaching
US equities as represented by the S&P 500 have broken major long term uptrend lines. However, thus far the index is holding above key support near the SPX 1820 level:
As bearish sentiment mounts and the technical backdrop continues to deteriorate an interesting moment is approaching; we are entering the most bullish three months of the year with most portfolio managers either underweight equities or heavily hedged:
During the last 20 years the S&P 500 has averaged a ~5% gain between October and the end of the year.
This dynamic makes it a very interesting time to be an active market participant. While it certainly appears that volatility is here to stay, a deepening of the equity market correction during early October could present market participants with an attractive opportunity to ‘buy fear’ knowing that they have seasonal tailwinds at their backs: