Post Labor Day performance is defined by a Triple Witching Week where stock options, index options, and index futures all expire at the same time on the third Friday of the month. The third week of September, the week of expiration, as been slightly bullish since 1990. The following week is consistently bearish posting only 3 positive gains in September since 2000.
The end of September is prone to weakness due to institutional portfolio restructuring; the last day of Q3, this year on september 28th, has been down 10 of the last 14 years. From 1995 to 1999, the Dow average 4.2% gains, only to follow with a six year losing streak averaging -5.9%. The Dow recorded two positive years in 2009 and 2010 averaging a 5.0% gain. For the last seven years, the S&P has posted gains in September with the exception of 2008 during the financial crisis. The NASDAQ also posted gains for the past five years with the exception of 2008.
Alex Kalish holds a masters in economics from Suffolk University.