Photographer: Victor J. Blue/Bloomberg
September has been the weakest month of the year. From 1885, the DJIA has been up in 47.4% of Septembers. The month has tended to be down despite the performance in August. The month has also been down in years ending in 3 and in pre-election years. Technology has been especially weak in September. The XLK technology index has been up 45.8% of the time for a loss of 2.6%. This month has been the weakest for the NASDAQ Composite over the last 43 years, the only month with a negative return.
Here is a September strategy for the NASDAQ 100. The 100 stocks are ranked for relative strength and for cycles. Rather than attempting to forecast the NASDAQ’s direction, the top five rated stocks are bought and the five bottom-ranked stocks are sold short.
Here are the stocks to buy:
Netflix-NFLX
NVIDIA-NVDA
Intuit-INTU
Adobe-ADBE
Amazon-AMZN
Here are the lowly ranked stocks to sell short:
Peloton-PTON
CSX Corporation-CSX
Tractor Supply Company-TSCO
Microchip-MCHP
Illumina-ILMN
Sorting through the top five, we can easily see the rising and falling relative strength depicted by the green line.
NVIDIA reveals recent new relative highs. Peloton shows a new relative low.
Relative strength is superior.
Relative strength has recently hit a new low.
