Mother Nature – One More Reason the Pullback is Not Over
- Posted by Greg Harmon
- on May 23rd, 2012
Seasonality is one of those things that is talked about in Technical Analysis books in the same chapter as the Election Cycle, Demographic Cycles, the 50 year Kondratieff Wave, planetary movements and all other longer term indicators. Generally a page or two each at most. Not very useful for a trader unless your timeframe is measured in years or the very shortest months. Seasonality also brings to mind commodities traders as they trade in perishable items that are directly and visibly impacted by the calendar. But seasonality can be helpful to the short term equity trader occasionally too. Now is one of those times. The weekly chart of the S&P 500, $SPX, below has been stripped down to easily show the seasonality in the Index that has been visible since the the Financial meltdown. And the story does not look like a happy ending for it this summer. Notice that each of the last 3 years the peak has occurred roughly in April and the movement back higher from a low point basing begins in August or September. Will it happen again. Maybe, maybe not, but it is worth acknowledging the recent seasonality and then noting that it fits with the recent trend in the broad market.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
Dragonfly Capital Updates
- Top Trade Ideas for the Week of May 20, 2013: The Best
- SPY Trends and Influencers May 18, 2013
- Cleveland’s Best Linkfest!
- Macro Week in Review/Preview May 17, 2013
- Dragonfly Capital Views Performance Through May 2013 Expiry
- Premium Earnings 5-17-13
- Which Way is Up?
- Cicso Kid Was a Friend of Mine
- Premium Earnings 5-16-13
- Lights Out for the Shiny Metal