This is the worst week for stocks—historically speaking

If history is any guide, stocks are set to slide.

September is known as a bad month for stocks from a seasonal perspective. It turns out that some technical analysts get even more specific than that. Ryan Detrick of LPL Financial has found that since 1950, the worst week for the S&P 500 has on average been the 38th week in a given year.

This week happens to be the 38th of 2016.

Detrick goes on to point out that the S&P's average return in a year's 38th week is minus 0.61 percent, and that the market has dropped in the 38th week in seven of the eight previous years.

Larry McDonald of ACG Analytics offers a potential explanation: Asset managers who are doing well in a given year may try to "protect gains" amid any glimmer of uncertainty. That is, funds beating the market in a given year will have an extra incentive to sell stocks in order to protect their annual performance number.

Still, McDonald added Monday on CNBC's "Trading Nation" that he "wouldn't put a lot of stock" in the market factoid, preferring instead to look to central bank actions as well as the presidential election to make his broad-market calls.

Zachary Karabell of Envestnet adds that "if patterns were destiny in financial markets, then the only people who would be making a lot of money would be chartists and quants," which does not appear to be the case.

For his part, Detrick writes: "Should this weakness occur, we would not view this as a reason to panic; instead, we would likely consider buying the dip, as we are looking for equities to end the year near current levels."

Stocks didn't suffer a particularly tough beginning to the week; the S&P 500 fell 0.04 points on Monday, its smallest single-day drop since 2012.


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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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