View from the Observation Deck

1. Today's blog post is just a brief reminder of the potential for a seasonality trade in tech-related stocks heading into Q4.
2. Two of the indices in the chart were up in 8 out of the past 10 fourth quarters. The S&P 500 Information Technology Index was up in 9 of the 10.
3. The best Q4 return for the S&P 500 was in Q4'03, up 12.18%. The worst showing was in Q4'08 (financial crisis), down 21.94%.
4. The best Q4 return for the S&P 500 Information Technology Index was in Q4'02, up 22.32%. The worst showing was in Q4'08 (financial crisis), down 25.73%.
5. The best Q4 return for the DJ Internet Composite Index was in Q4'02, up 40.91%. The worst showing was in Q4'08 (financial crisis), down 25.39%.
6. One of the potential boosts for tech-related companies in Q4 comes from IT spending. Managers have just three months left to spend their budgets. It is often a use it or lose it proposition.
7. A second potential driver for business is the launch of new consumer electronics products to coincide with the holiday shopping season.