At the start of September, I wrote about the seasonals and warned that it was a bad month for stock markets with a note that it was the worst calendar month for the S&P 500. It certainly delivered with an 8.7% decline.

In FX, the US dollar continued its year-long parade higher in September. It was a wild ride with incredible fundamental opportunities in the forex market. We leave the month with market participants in a horrible mood. The AAII sentiment survey is 60.8% bearish this week and that means -- for the first time in the history of the survey dating back to 1987 -- it's +60% for two weeks running. It's also only the 6th time above 60% ever.

AAII sentiment

Everyone is sensing a recession. That's usually an opportunity but what do the seasonals say?

  • Second best month for AUD
  • Fourth best month for the dollar index
  • Weakest month for EUR/AUD
  • Third weakest month for the euro
  • Third-best month for the Nasdaq (and not far off from the best), though volatility is high with double digit gains/losses not uncommon
  • Fourth best month for the S&P 500
  • Third best month for the DAX
  • Strongest month of the year for natural gas
  • Weakest month of the year for oil
  • Seasonal weakness in bonds