As you’ve probably noticed, the U.S. stock market’s volatility has been notably low over the past 2 months. It’s been 55 consecutive days without a >1% daily change!

*This is surprising because volatility is typically higher during August and September (more bearish seasonality).

Here’s what happened next when low volatility returned to the U.S. stock market:

first case of “55 consecutive days without a >1% daily change” in 7 months

Conclusion

As you can see:

The stock market can experience some short term weakness (1 month forward returns)
The stock market’s medium-long term forward returns are mixed.

But here’s the more important point. Our market studies from January-August were notably bullish for the stock market. But as of this month, we are seeing more mixed studies (neither consistently bullish nor bearish). This is what happens when we are getting closer to a major top in 2019. Feel free to read my What I am worried about, as a U.S. stock market trader post.

Click here for more market studies.

By Troy Bombardia

BullMarkets.co

I’m Troy Bombardia, the author behind BullMarkets.co. I used to run a hedge fund, but closed it due to a major health scare. I am now enjoying life and simply investing/trading my own account. I focus on long term performance and ignore short term performance.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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