Although it is rare that November is the month for major market bottom, but it is not that uncommon to see November with a lower low than October. Checking back to see how many times between 1970 to 2007 that the month of November experienced a closing low lower than the lowest closing low made in October, and the result indicates it is not that uncommon. The November of 1971, 1973, 1976, 1977, 1978, 1979, 1983, 1988, 1991, 1994, and 2007 have a closing low that were lower than their respective month of October. That's nearly 30% of the time in the last 37 years. Another interesting observation is since November of 1994, there was a 12 years gap before another month of November has a closing low lower than October. I believe it is this 12 years gap that gave most people, myself included the perception that November is a bullish month. Certainly with how the market retreated in the last couple of days, odd is very likely this November could be one of those November that will have a closing low lower than the low we just experienced in one of the worst month of October in history. The lowest closing low made last month is on October 27, 2008. Keep an eye on that day's low. Finally, there were only 3 November between 1970 to 2007 that made market bottom, 1971, 1978 and 1994, that is only 8% of the time.
For my trading strategy, I will continue to nibble on shorts until the market breakdown and make new low, then I will consider taking a more normal position sizing in swing trade & trending positions. Oil, gold, and the inverse ETF will be my primary focus. The possible long position on biotech pharma is off the table for now. Market's primary trend is still down.
