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Will October's Market Minic September's Comeback?

October 02, 2009

The market had seven months of consecutive gains after its March bottom:

We made a prediction in early May that the market would see consecutive monthly gains up to the end of this year (that is, we will see 10 non-stopping monthly gains this year).

So far, so good. We have three months to go to prove our prediction.

Traditionally, September is the weakest month in a year. But this year, we did not see the expected corrections. After a big one day drop on the first day of September, the market entered a momentum rally and made one high after another one.

Now the question facing every investors is how the market will do in October.

After yesterday's biggest one day drop in three months, people may think that the long-waited correction will finally arrive. Of course, as an investor, we need to prepare for a market correction. But this may be another attempt by market makers to shake out weak hands. The chart up to this point is very similar to last month's:

September 1 saw a big one day drop and another three days of losses in a row. People talked about a possible September correction then. But we did not see it. Instead, in the following days, the market made a very strong comeback.

October 1 saw another big one day drop. Will we see another strong comeback next week?

We are quite bullish on the market's future direction. Of course, only time will tell.



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