As we’ve mentioned recently September is the worst month for stocks.  Since 1928 the S&P 500 Index has averaged a -1% return.  What works well in September?  Bonds.  Some color from LPL Reasearch:   Although September has historically been a weak period for stocks, bonds have generally climbed, with the Bloomberg Barclays U.S. Aggregate Index gaining an average of 0.69% in September since its inception in 1976.

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Here’s a look at the TNX(CBOE 10-Year Bond Yield Index)chart.  Yesterday the index broke below major support near 2.1%.  We expect more downside(lower yields)as this breakdown develops.  A drift all the way down to the post election lows(1.88%)looks very likely.  This fits in well with the seasonal bond patterns that dominate the month of September.

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Hat tip LPL Research