Feeling lucky?After the last few days, which have seen vicious rallies in the US and Europe, investors are once again feeling good that the bottom won’t fall out of the market and/or the economy.
But the fact of the matter is that things are about to get downright treacherous. Starting now.
Dan Greenhaus of BTIG explains:
For investors that have written off the summer, attention will soon have to shift towards positioning for the fall/winter. The S&P 500 is up 5.2% thus far in June/July (3.9% for the Russell 2000) but August/September’s poor historical performance looms large. Further, while one might be flirting with positioning for an end of year rally, two important points should be made. First, the U.S. debt ceiling is likely to come into focus once again, probably around December, while the prospect of another government shutdown debate is not out of the question. Even if the latter problem is resolved, its likely to be only for a few months and we cant forget Greece; each troika review brings the possibility of exit and we see tonight that the lenders have indefinitely extended their stay. In any scenario, 2013 should begin with as much uncertainly as 2012 is likely to end.
So yes, in a couple days we’re starting upon the worst months for the market, followed soon thereafter by the election, followed soon thereafter by the fiscal cliff mess.
That’s not to say the market can’t rally… but there’s a lot for it to overcome if it does.