Seasonality Map for April, 2010
Below is a map of expected strong/weak days for the U.S. market for April, 2010 based on historical seasonality patterns. This is the first of what I plan to be a monthly feature at MarketSci.
Read more after the image.
One of the unexpected side effects of keeping this blog is I’ve become a bit of a proponent of stock market seasonality (i.e. bullish/bearish biases around certain times of the month, year, etc.) This monthly seasonality map will force me to tie my seasonality studies together, and eventually I intend to use it as one of the many factors I’m considering in my own trading.
I want to make clear that I do NOT think that seasonality alone is sufficient to justify a trade; however, all of the seasonality plays included in this report have been powerful enough and consistent enough that I do think they should be one of many tools in the trader’s toolbox.
This is a work in progress and I intend to add additional plays as I flesh out my own thoughts. The studies included at the moment include: (a) the turn of the month, (b) the first and last day of the month, (c) the day-after options expiration, (d) the monthly W, and (e) individual holidays.
Of course, not all seasonality plays are created equal; some observations have been stronger than others, so I’ve rated the strength of each from -100% (most bearish) to 100% (most bullish). Very low ratings (ex. -25%/+25%) indicate the play has been very inconsistent over time and needs to be digested with a very large grain of salt.
This is a first pass at what will be a constantly evolving work. Reader input is always appreciated.
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Filed under: Monthly Seasonality Map | 6 Comments