Can the religious faith really help to trade?

 

 I assume not many people know what Rosh Hashanah is if you are not Jewish. It is the Jewish New Year. Oddly enough, the stock market tends to not perform well during the Jewish New Year period that lasts 10 days starting from today. We got a severe plunge of the market today. Is it just a coincident or it suggests something? No one knows for sure of course but next week there is a big market moving event, the FOMC. Will that trigger a big run for the market? Again, no one knows for now but there is no hurt to be prepared for such a potential!

 If you read my blogs, you know this was my last Friday's blog talking about the potential selloff starting from the Jewish new year. Well, this has turned out to be a great call. You see: Last Friday morning, the S&P 500 was at 4505. Yesterday afternoon, the index closed at 4330. Selling on Rosh Hashanah turned out to be a smart move.

If you haven't counted yet, next Monday will be the ending of this bearish 10 day period, which is called Yom Kippur. Per the faith, this should be a good starting point for buying stocks. Can this second part of the religious trading strategy also work out? Of course, no one knows for sure ahead of time but I think buying on Yom Kippur may prove to be equally as smart.

Here is my thought early today. Luckily we did took a small gain from a bullish SPX put spread placed yesterday, thanks to the strong bounce we saw this morning. Also correct that we saw a late day selloff that has wiped out all the initial gain from the intraday rally and some. SPX actually closed 9 points lower. 

If I'm right again, we will probably see some selloffs early next week for SPX dipping down to 4300ish, which can setup a solid base for a week long "dead cat bounce".