The September Quarter

We are a week from end of another important quarter. And we already have clear positive price confirmations. And we should not forget that a failed negative indicator is confirmed strength. So if SEP-NOV negative seasonality does not deliver, it’s a bullish sign for global equities and respective assets. Now the SEP performance tells us that the bull is alive and strong.
Quarterly confirmations are stronger than monthly or weekly price confirmations. The larger the degree of time, the more important the confirmation. The only trade-off is that the more important the price confirmation, the slower it takes to confirm or negate. Simply putting it says that if we are looking at the Sep quarterly price confirmation as positive, it will take another quarter till end of year to confirm its correctness. On one side this could be too long a period for traders, but on the other hand, this is all the investors need for a positive 2012 heading into 2013 and ahead.
Speaking about price confirmations, the DOW 30 had an indecisive quarter in June as it made a Harami small body indecisive candle pattern. The running quarter overcame the last quarter’s indecision and moved clearly higher. This is a positive price confirmation and takes DOW inches from its all time historical high. With the strength the DOW 30 is showing we think the DOW 30 is not only going to retest its historical highs, but also make an attempt to break it. Whether this happens this year or early next year remains to be seen.
In terms of other positive confluence, the Indian Sensex behaved similarly. First it had an indecisive last quarter. This quarter we have a clear positive confirmation, which leaves the true trendline resistance behind. And assuming we have no crash back down till 17,000 in a week, we have all positive signals suggesting that the move up till 21,000 and higher has started.
Both SSEC and MSCI ASIA ex Japan are above trendline support. Brazil and BUX are getting ready for RSI and Price resistance retest and potential positive breakout. While Natural Gas, Gold still suggest stagnation and one last leg lower. Crude seems to be positively consolidating.
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Dr. Ionut Nistor is the co-author of Performance Cycles paper published in Kyoto Economics Journal in March 2009. Ionut is a professor of Corporate Finance at Babes -Bolyai University and a post doctorate fellow at the Kobe University in Japan. He is fluent in Japanese, Romanian and English.
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