Will Back To School End Summer Lull?
Over the years there has been a trend in stocks that is repeated time and time again. The summer lull. It seems each year trading slows down, and people take a couple of months to put their portfolio on cruise control. Is is called the summer lull, and I have oft heard people say, “see you again in September”. As August comes to a close the big question is whether the lull that has had a grip over the markets these past few months will continue will ease up, and whether cash will begin to be put back to work in the markets.
Sirius XM has had anemic volume for a couple of months now. With the yellow school buses getting set to roll, we may have a ray of light coming. I already anticipate that Sirius XM will have a good Q3 given the auto sector numbers, and while the economy is not yet fully recovered, people are beginning to take a peek back at their portfolios and find what they perceive as a bargain. Sirius XM has spent the summer in a trading range between $0.90 and $1.10, and at this writing the equity sits in virtually the same place.
Over the next month or so there are several factors that will impact the markets. The summer lull ending and the mid term elections are two key components that investors should watch for. Without getting into a political discussion, the fact is that, traditionally, when republicans win elections the markets tend to respond well. The republican party is seen as more pro-business, and typically the markets react well to such news. There are many already seeming to indicate that the republicans will gain seats in these mid term elections. If throughout September the summer lull begins to dissipate, and if polls are indication a shift in Washington, the markets could be set to stabilize and begin a new climb.
It will be interesting to what happens with the summer lull over the next few weeks, and even more interesting to see how the markets react to the elections. With Sirius XM, I believe there is solid footing above $0.90 and that pending news can finally help boost the stock as more and more eyes begin to follow the markets again.
Position – Long Sirius XM Radio
Many parents buy their children a new car when they go to college. It questionable as to whether or not that 90 day free sub will turn into a paying sub. On the other hand, if a three to four year sub or even a lifetime sub had been worked into the car purchase it would be money in the bank for Sirius.
The volume has already picked up over the past 5 trading sessions:
Aug 26, 2010 0.99 1.00 0.96 0.96 109,178,956
Aug 25, 2010 0.96 1.00 0.96 0.99 167,773,111
Aug 24, 2010 0.97 0.98 0.96 0.96 168,403,884
Aug 23, 2010 0.99 1.00 0.98 0.99 96,602,401
Aug 20, 2010 0.99 0.99 0.97 0.97 116,633,727
Aug 19, 2010 1.00 1.02 0.99 0.99 58,284,852
Aug 18, 2010 1.00 1.00 0.99 0.99 30,068,438
Aug 17, 2010 1.00 1.01 0.96 1.00 39,029,286
Aug 16, 2010 0.99 1.00 0.99 1.00 47,974,052
Aug 13, 2010 0.99 1.00 0.99 1.00 45,616,433
Aug 12, 2010 0.97 1.01 0.97 1.01 83,557,981
Aug 11, 2010 1.00 1.00 0.98 0.98 99,066,531
Aug 10, 2010 1.02 1.03 1.01 1.02 37,694,632
Aug 9, 2010 1.05 1.06 1.03 1.04 35,873,076
Aug 6, 2010 1.04 1.06 1.03 1.05 29,050,907
Aug 5, 2010 1.06 1.06 1.05 1.06 37,421,889
Aug 4, 2010 1.05 1.06 1.02 1.06 90,314,953
Aug 3, 2010 1.04 1.05 1.00 1.01 56,175,306
Aug 2, 2010 1.03 1.05 1.02 1.05 48,696,658
As I post this at 3PM on 8/27, trading volume today is already approaching 190M!
also often referred to as “sell in May and go away”
Spencer ,
I always have thought that you were a good , honest journalist and still believe that to be true , but this from your post shows just how effective the reps echo chamber from Limbaugh to Faux News and all the others that carry water so loudly for the reps are .
“The summer lull ending and the mid term elections are two key components that investors should watch for. Without getting into a political discussion, the fact is that, traditionally, when republicans win elections the markets tend to respond well. The republican party is seen as more pro-business, and typically the markets react well to such news.”
I have heard this from more than a few people , they usually have a tea bag hanging from their tooth !
THE FACTS AND REALITY ARE DIFFERENT THAN THE RIGHT WING TALKING POINTS THOUGH:
“Since 1929, Republicans and Democrats have each controlled the presidency for nearly 40 years. So which party has been better for American pocketbooks and capitalism as a whole? Well, here’s an experiment: imagine that during these years you had to invest exclusively under either Democratic or Republican administrations. How would you have fared?”
“As of Friday (October 14th 2008), a $10,000 investment in the S.& P. stock market index* would have grown to $11,733 if invested under Republican presidents only, although that would be $51,211 if we exclude Herbert Hoover’s presidency during the Great Depression. Invested under Democratic presidents only, $10,000 would have grown to $300,671 at a compound rate of 8.9 percent over nearly 40 years.”
http://www.nytimes.com/interac.....CHART.html
You would think that track records with that HUGE a difference would be common knowledge among the investing class at least .
Eduardo…..
1. I do not listen to Rush at all, Nor do I watch Fox News very often. I have avoided talk radio for about 2 years now.
2. The markets were flat for many years, up until about 1970.
3. Interest rates carry a HUGE impact.
4. War years are going to be flat.
4. look at an S&P chart and note depression, WW2, Viet Nam, Gulf War, and 9-11. Also the dot com bubble was a huge benefit that had nothing to do with politics.
5. The fact is that businesses like the republican financial agenda more than the democrat financial agenda.
If the Republicans don’t win enough seats to stop the Democrats destructive agenda, the stock market will crash big time. Hyperinflation and a depression are on the way unless the government stops printing money, thereby making the dollar worthless.
“5. The fact is that businesses like the republican financial agenda more than the democrat financial agenda.”
And of course you have the numbers to prove this instead of just your assertion ?
Kind of like these I provided right ?
“Since 1929, Republicans and Democrats have each controlled the presidency for nearly 40 years. So which party has been better for American pocketbooks and capitalism as a whole? Well, here’s an experiment: imagine that during these years you had to invest exclusively under either Democratic or Republican administrations. How would you have fared?”
“As of Friday (October 14th 2008), a $10,000 investment in the S.& P. stock market index* would have grown to $11,733 if invested under Republican presidents only, although that would be $51,211 if we exclude Herbert Hoover’s presidency during the Great Depression. Invested under Democratic presidents only, $10,000 would have grown to $300,671 at a compound rate of 8.9 percent over nearly 40 years.”