Year after year the media reminds us of how awful September is in the stock market - not for us. Not only did we see the extremely successful launch of MarketSmith on September 15th, but we also saw confirmation of a positive trend change in the market on September 1, 2010. On that day, I noticed many of the market leaders’ chart patterns beginning to tighten up, compared to their volatility over the last few months. It’s never guaranteed that new uptrend will continue, but we do know that no bull market has ever started without what we refer to as a “follow through day”.

 

On September 1st, our rules dictated that we slowly begin building positions. Since then, we have seen the market move into a clear uptrend as the rally broadened to include a wide variety of industry groups and stocks. We are subtly beginning to gain traction, unlike many of the other false rallies of this past summer. Keep in mind, that should this rally falter, our individual stock rules, and our market timing rules will force us to react and get us out. We are not trying to predict what will happen, we merely interpret each day as it comes. We let the market tell us what we should be doing.

 

Best Returns,

 

Scott O'Neil, President, MarketSmith Incorportated