A roller coaster ride that was tough is behind us. But the past is the past.
But I'm also not a clairvoyant and able to see the future.
What I look at every day is the present, so the here and now. I try to mute all kind of voices from experts and analysts as much as possible and try to rely on my expertise only.
But there is one tool that I love more than every other one and which helped me to get the as I call it "bigger picture" of the market environment.
What I'm talking about is the seasonality of different market classes referred to trading in a longer term range (which for me mostly refers to a holding period between 2 and 8 weeks related to the underlying asset).
But thats also not the holy grail of investing, its like Mark Twain said: History doesn't repeat itself, but it rhymes. So the key here is to detect when the seasonalities/cycles start to change/kick in.
Here are some charts and analysis of market cycles which keep me up at night at the moment:
Here we can see that a spike in volatility usually starts at the end of August and occurs till the end of October.
The USD showed some real weakness in the last weeks. This chart shows that it isn't a coincidence and could hold on in the long term until 2025. But be aware that this chart shows a really long term perspective of the USD.
However so far this cycle had a 100 percent win rate since over 50 years.
Here we also see that the August and September are historically seen the two worst performing months in the S&P as well as in the DOW.
And finally here is my cycle forecast for the S&P and the DOW related to the next few months, which also signals a phase of downside momentum. If I see technical confirmation I will rely on these cycles and ride the Short wave until October/November.
If this is the case we could also see some great opportunities in a spread trade between equities and bonds.
Short said here's what I expect from the upcoming months as of today, related to the US stock market
Short equities till at least the end of September as a revaluation of the actual economic situation in the US.
Long equities at the beginning/middle of October especially in front of the elections.
Tech will even further outperform the broader market after a short setback, while whole principles change here in favor of a more digitalized world and market.