Could It Be a September Rally?

We warned you last week about the historically tough time for equities during the month of September. Well, so far, that trend hasn’t held true during 2006. Stocks have seen a pretty solid move to the upside in recent weeks, and many of the major market indices now are approaching their May highs.

Let’s take a quick glance at the price movement of the S&P 500 Index during the past four months. As you can see, the index has climbed near the 1320 mark — right about where it was in May before this latest market correction began.

While this trend is an encouraging sign for the bulls going forward, I really am not convinced that this market has the conviction to push through its previous highs and to sustain itself at those levels.

I don’t want to sound pessimistic here, but in my view there is just too much risk right now for me to declare that the bull is back in town? A slowing economy, interest rates, the housing bubble, and geopolitical turmoil all still are where they were before we entered September. Those factors are not likely to fade anytime soon.

The advice I’ve given to my Successful Investing subscribers is to remain in cash until we see a clear change in the sentiment and performance of the major market indices. So far, we have not seen the kind of market conviction that would convince me to get back into equities. Are we close? Well, yes, but being so close just means that you have to approach your decisions with that much more caution.

Would you like to find out how the Fabian Plan can help you to determine if the current uptrend in the market is for real or whether what we’re seeing right now is a fool’s rally?

Click here now to position yourself for maximum profits.