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Chart of the Day - sell on Rosh Hashanah, buy on Yom Kippur.
As I sat in the main business building yesterday, two young me came into the Atrium, said something in Yiddish, & blew on a ram's horn, a shofar. At this point I realized it was Rosh Hashanah. For some reason, my mind immediately thought of the old Wall Street adage to sell on Rosh Hashanah and buy on Yom Kippur.

The logic is as the new year is beginning, people should be free as possible of belongings & worries to start this 10 day period of self-reflection & self-appraisal. A quick Google search suggests it has worked 29 of the last 52 years, so basically a coin toss. If you include there is a positive drift to mkts typically, maybe there is something very small there but you would be squinting to see it.

This year in particular it may be tough if we look at the price action across all asset classes. We get to Rosh Hashanah and we are at the lows of the year in many products. Yom Kippur is on October 5. Are there any catalysts at that time?

The big mover of late has been the British Pound in purple which is hitting lows not seen since the Maggie Thatcher era. In fact, there looks to be a fat finger error/flash crash/barrier option breach on Monday that took the currency town 5 handles during Asian time (hat tip SR). Products tend to drift back in the direction of the error, so it wouldn't be surprising to see GBP move toward par.

Copper has been the weakest in yellow with concerns about housing mkts globally, led by China which caved first, but followed by the UK & the US. We will get the Natl People's Congress starting on Oct 16 in China so by early October there could perhaps be some positive news ahead of that. We will also get quite a bit of news on the jobs front in the US in early October. Perhaps these events can support the commodity mkt. There might be some hope for copper.

I have written about the relentless weakness in Treasuries, something most people have not really ever seen in their careers for any stretch. In early October, we will also be getting economic data on the ISM & CPI/PCE. As I showed yesterday, 10yr yields appear to be meaningfully disconnected from this data on growth & inflation, so perhaps these data is a catalyst to see some bid return to bonds.

Probably the best bet for a buy on Yom Kippur would be stocks. The week after Yom Kippur is the unofficial start of earnings when the big banks report. Historically, when the stock mkt is weak into earnings, stocks really only need to come in line vs. the lower bar & we can see relief rallies. I think it is fair to say stocks are weak. I think it is also fair to say that the bar is low on earnings. Could this be a bear mkt rally like we saw in July, when that earnings collapse did not come to fruition?

I wonder if anyone is really feeling confident to press their shorts at this point. Let me know in the comments. For those who celebrate, Shanah Tovah.

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