September is traditionally the worst month of the year for stocks. And its first two days of trading, in which the S&P 500 fell 3.77%, seem to reinforce that belief. As we enter September, there have been few positive changes in the U.S. and European economic and political arenas, and the same old technical problems seem to haunt the bulls.
The market has turned down from the enormous resistance formed over a seven-month period with a bearish daily reversal from the Dow Jones Industrial Average, and the S&P 500 is in the process of forming what appears to be a bearish flag. Dow Theory has confirmed a bear market, and all of the major indices have flashed a death cross.
Despite the potential for near-term rallies, stocks show few signs of technical strength, and the overall trend is down. So any up days should be treated as opportunities to unload poor performers or enter short positions.
Here is our list of stocks to sell in September: