Will we have a 2011 September Slaughter and October Massacre?

[Alan Mendelson]

September is the worst month for owning stocks, historically speaking, and the two big crashes came in October -- the crash of 1929 and the crash of 1987.

September and October have the reputation for being the worst months and the media uses phrases such as September Slaughter and October Massacre to describe the sell-offs over the years. I admit I've been guilty of using the terms when I was reporting the news on radio and TV.

Will we have a September Slaughter in 2011 and an October Massacre to follow?

Or perhaps are we close to a bottom and there won't be much more downside action ahead?

[Alan Mendelson]

Today's 300 point drop on the Dow, controversy over the President's jobs plan, worries about the European crisis and the newest scare about terrorism over the weekend can certainly fuel the fears of a September sell-off for Wall Street.

[Alan Mendelson]

I hear several market commentators now talking about "seasonal patterns" for stocks. Did they just realize it now? Why weren't they warning their clients during August?

So far no one is using the phrase "September Slaughter" or "October Massacre" which were coined after the vicious seasonal patterns following the 1987 crash.

[Alan Mendelson]

Okay, so here we are on the first trading day of October and the Dow is down 258 points. Not exactly a positive start to one of the worst months of the year to hold stocks.

We escaped a September Slaughter, however -- the selloff in September just wasn't that big.

Now, will the selling catch up with the calendar?

[Alan Mendelson]

Half of October is in the history books and still no sign of an October Massacre. Heck -- there's not even a selloff. Stocks are now showing a gain for the year. What's happening here? Is it a fakeout or suckers rally?

[Alan Mendelson]

Only one full week of trading left in October with no sign of a selloff coming. What is especially encouraging is that stocks tend to rally at the end of the month when new money enters the market through pension and investment plans. Can we be bold enough to write off the idea of an October selloff this year?