Mish's Daily
August Trading Not for the Faint of Heart August 6, 2025
August is a tough month to trade.
There has been seasonal weakness over the past 35 years.
Liquidity is diminished and the volume is thin.
Volatility can rise.
Tax loss selling and rebalancing often occurs among institutions ahead of the end of the 3rd quarter.
Earnings momentum and fading optimism can taper off in August.
I ended my day with Maggie Lake.
Plus, this will be my last Daily until I return from a vacation on August 25th.
Maggie and I covered a lot as always, and the link is available here.
Here are some of the notes I sent her ahead of time.
Yields topped as predicted and now, we could see further drop-looking at TLT basing but fun starts over 90. The dollar failed 100 if breaks 98 new leg down over 100 could see 103
Above is a chart of TLT. It represents everything I covered with Maggie and in other Dailys.
TLT, after an auction today, sold off. However, the chart is clear. The rally Tuesday was to the July 6-month calendar range high (I talk a lot about that).
The SPY continues to outperform for now which shows risk on.
The Real Motion Indicator had a mean reversion sell signal right at the calendar range high.
HOWEVER, the dots are above the moving averages while the price is above the 50-DMA and below the 200-DMA. A bullish divergence.
What I discussed with Maggie is the possibility that yields drop further, TLT clears the resistance and SPY, can continue to run as well, but watch for the performance to shift.
Great read
https://marketgauge.com/resources/mishs-daily/august-trading-not-for-the-faint-of-heart/