Chart of the Day - Tuesday, August 31st, 2021

Today’s Chart of the Day was shared by Michael Turvey (@MikeTurvey_TDA). It's a monthly candlestick chart of the S&P 500 over the past 4.5 years. Michael points out that the S&P 500 just logged its seventh straight monthly gain. The index has only achieved this feat 14 other times since 1950. As we discussed yesterday, September has historically been the worst month for the S&P 500. However, seasonality has been a headwind for the past five months, and yet, the S&P 500 has not blinked. Legendary technician, Walter Deemer once said, "when the market doesn't do something it should do, it usually means that the underlying trend is unusually powerful." In other words, there is information to be gleaned from the fact that the S&P 500 has been so resilient in the face of weak seasonality. If the index can extend its monthly winning streak to eight this month, it will be further evidence of a powerful underlying trend.