Investors are holding their breath as the Dow Jones Industrial Average and the S&P 500 move towards a retest of the 2022 low this week, the last trading week of September. September falls in the middle of the year. seasonal weakness for stocks. By contrast, November and December are usually strong months but – with the market heavily bearish year-to-date – the chance of a year-end rally seems less likely, according to Ned Davis Research. “How quickly the economy and earnings decelerate will probably determine whether a year-end recovery is viable,” said Ed Clissold, chief US strategist at Ned Davis. “Historically, the fact that the market has been down year-to-date makes a year-end rally less likely but not very unlikely.” “As the S&P 500 rallied throughout September, in the last three months of the year, it was up 83.1% versus an average of 4.7%,” he added. However, “when the S&P 500 fell throughout September, it was up only 54.8% compared to the 2.3% average.” On the plus side, though, while midterm election years have been the weakest in the past, year-end rallies have always been stronger in those years, Clissold noted. “The fall of the midterm year to the summer of the application year is the strongest period of the four-year cycle,” he said. The S&P 500 index temporarily broke below the June low of 3,666 on Friday, and strategists said if it dips below the low again and stays there, it could signal range target Next target is 3,400 or less. The broad market index is down 23% this year and more than 7% in the month to September. According to Ned Davis, if the losses extend through Friday, that will make the first nine months of this year bad. The worst since 2002 and the fourth worst since 1926.