August is starting off with a very positive tempo.
It got me to thinking about where the market has been this year, and where it may be heading.
I do believe the stock market has seen the highs for the year.
The markets have a rhythm that revolves around the seasons.
From November to May is when the bulls are apt to run.
This is the prime time to trend trade.
The summer months are usually a lazy sideways period that may throw a rally into the mix just to get your attention.
The last quarter is the scary season.
August will often contain price peaks.
Price will attempt to eclipse new highs, but fall back to lower levels and then start the process again.
The hallmark of trading in August is lots of chop.
That means dusting off the oscillators if you trade, or standing aside and avoiding the price whipsaws.
Reminders of the sickening drops that have occurred in September and October are enough to put any trader on edge.
My goal for this season is to try and ensure that none of us give back what we have gained.
July was a good month for traders.
Although I've heard that many missed the move or were convinced the market was heading lower.
Those that tried to short the swing moves in July had their faces handed to them.
As August matures it will probably become evident that this move in July was the summer rally.
There are headwinds blowing economically and politically that will likely make the last quarter a very interesting time to trade the markets.