One possible path for the SPX

S&P Seasonal Chart Courtesy seasonalcharts.com

I know the world is supposed to be ending and all, but what if... just maybe an alternate scenario is coming to the fore?  People are obsessing on the bear case in an almost fetishistic unity and yet, there are sentiment and T bond structures (reviewed in NFTRH this week) arguing against the herd.  How often is the herd right, anyway?  Think about it.

Check out this little seasonal model.  SPX tends to form a Reverse Symmetrical Triangle (reversal) pattern after a toppy summer right into Wall Street's Q4 bonus season. 

I will allow for one more dunk to new lows (per the late October down-spike circled, but I cannot see how I can be bearish after that.  Seasonals, improving valuations and the stuff we reviewed in NFTRH153 on sentiment and T bonds, are making me feel greedy; greedy and bullish, pending a bottom.

Would it not be sweet to get a final and scary dump in October, right on cue?  This scenario has the crowd being setup once again.  You have got to love the markets.


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