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Buzz and Banter

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Jason's study outlines those instances where October began with 5 straight up days. In post WW2, there were four instances; 1970, 1983.1989, 1997. The market followed with a decline of around 4% in the 30 days following the occurrence.

How you take this depends on your own time frame. The one we use at FTN Midwest Research is intermediate-term. So I have a precedent that the market could fall by 4% over the next month. Looking at those years of occurrence, what should be the course of action on the drop?

The point is - someone focused on very near-term looking at Jason's awesome work would likely lean short for the next 30 days, whereas someone looking out a bit further would use the weakness as an opportunity given that no event in post WW2 era led to a sustainable long-term major market top.

I want to reinforce that I do not think the market should go straight up, just that when it does correct, as long as the intermediate-term fundamental and technical framework remain intact, a 4-7% decline would likely be viewed by most investors as an opportunity.

Great work Jason.
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I am going to refer to Jason as "statmaster" from now on.
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