Why I shorted SPY and NVDIA on September 2nd

The trades are working out well. I thought I'd share why I got into them.

I like to look at past years that are 90% or more correlated with the current daily price action of SPY. I check / update these correlations essentially every Sunday.

Over the last 4 weeks I noticed that the following years were consistently 90%+ correlated with current price action…

• 1929 — 93%

• 1936 – 94%

• 1945 – 94%

• 1951 – 90%

• 1955 – 96%

• 1959 – 92%

• 1964 – 91%

• 1986 – 96%

• 1987 – 94%

• 1993 – 90%

• 1996 – 93%

• 1997 – 94%

• 1998 – 92%

• 1999 – 93%

• 2007 – 90%

• 2013 – 91%

• 2014 – 93%

• 2017 – 93%

• 2018 – 91%

• 2021 – 92%

Using a tool called Seasonax I selected these years to show me the average price action of all those years combined on SPY.

The graph showed a clear drop off starting in September with a (-2.9%) average return between September 1 and October 27th for all those years combined.

Looking at ALL years (1928 – 2023) there is a (-1.51%) average return with the market going down 57.5% of the time between September 2nd and September 30th.

For NVDA specifically over the last 26 years, it falls for an average of (-4.1%) between August 30 and October 8th 52% of the time.

So using these correlations and historical statistics and seasonality I used this as the basis to short the market.

And will be covering around September 30th and going net long at the end of October.