September Stock Market Blues
Are you feeling down? It may be the September Blues. The seasonal phenomenon of gloomy feeling may be attributed to returning to work or school. It could also be the shorter days, the cooler temperature, and the darker outlook that bring on low moods and lack of energy during autumn and winter.
Some people also have a medical condition called seasonal affective disorder (SAD) that worsens during this timeframe. The lack of light and other factors such as colder temperatures can lead to increased anxiety and depression.
On Wall Street, traders recognize that September is ominous for stocks. The reason boils down to something similar to the above scenario, but somewhat simpler – post-holiday blues. Century long studies have shown the return to work period (September) has led to a 1% average decline in popular market indexes such as the Dow Jones Industrial Average and the S&P 500 Index.
Some believe bad corporate news is also more likely to occur after the summer holidays. The after holiday effects are apparent across major stock market averages, domestically as well as international equities. It is a global phenomenon.
The ability of news to be disseminated instantly over the internet and through numerous social media platforms, coupled with an interconnected financial marketplace can exaggerate the September stock market blues. The proliferation of electronic trading, quant trading, computerized driven models can also heighten the market swings in the marketplace.
Even the best traders and investors can be impacted by the September Blues. After all, human beings are social creatures driven by emotions.
With the above thoughts in mind, we have updated the near-term technical levels for the key stock market indexes, including S&P 500 Index, Dow Jones Industrial Average, and the Nasdaq Composite Index.
S&P 500 Index (SPX – 4,493.28)
Support 1 = 4,480 (8/23/21 breakout)
Support 2 = 4,421-4,451 (50-day ma and the bottom of Jul 2021 uptrend channel)
Support 3 = 4,368-4,397 (8/19/21 low and the bottom of Apr/May 2021 uptrend channel)
Support 4 = 4,232-4,233 (38.2% retracement from Mar-Sep 2021 rally and 7/19/21 low)
Support 5 = 4,118-4,134.5 (50% retracement and 4/20 and 5/4/21 lows)
Support 6 = 4,037.5-4,078 (61.8% retracement, May 2021 lows, and 200-day ma)
Resistance 1 = 4,546-4,555 (top of the Apr/May 2021 and Jul 2021 uptrend channels and 9/2/21 all-time highs)
Resistance 2 = 4,593-4,595 (8/23/21 breakout targt and V-pattern breakout target)
Resistance 3 = 4,695 (Apr/May and Jul 2021 uptrend channel breakout targets)
Dow Jones Industrial Average (INDU – 34,879.38)
Support 1 = 34,690-34,695 (Jan 2021 uptrend and 8/19/21 low)
Support 2 = 33,019-33,742 (200-day ma and May/Jun/Jul 2021 lows)
Support 3 = 32,007-32,071 (3/8/21 breakout, 3/25/21 low, and 38.2% retracement Oct 2020-Aug 2021 decline)
Support 4 = 31,272 (Feb 2021 breakout)
Support 5 = 30,547.5-30,887.5 (3/4/21 low and 50% retracement)
Support 6 = 29,768-29,856 (1/29/21 low and 61.8% retracement)
Resistance 1 = 36,572-36,871 (Aug 2021 base breakout target and 161.8% Fibonacci projection)
Resistance 2 = 38,150 (top of Oct/Nov 2020 uptrend channel)
Resistance 3 = 40,923.5 (V-pattern breakout target)
Nasdaq Composite Index (COMPQ – 15,248.25)
Support 1 = 14,804-14,813.5 (8/23/21 breakout and 50-day ma)
Support 2 = 14,423-14,545 (bottom of Jun 2020 uptrend channel and 8/19/21 low)
Support 3 = 14,150-14,211.5 (6/23/21 breakout, 7/19/21 low, and Mar 2021 uptrend)
Support 4 = 13,755.5 (200-day ma)
Support 5 = 12,787-13,004 (1/29/21, 2/23/21, 3/25/21, and 5/12/21 lows)
Support 6 = 11,065.5-12,397 (11/27/21 breakout and 3/5/21 low)
Resistance 1 = 15,429-15,614 (8/23/21 breakout target and top of the Mar 2021 uptrend channel)
Resistance 2 = 15,990-16,026 (6/23/21 breakout target)
Resistance 3 = 17,470 (top of the Jun/Sep 2020 uptrend channel)