Yale and Jeffery Hirsch of the Stock Traders
Almanac
(www.stocktradersalmanac.com)
are the original discovers of market seasonality. The table on the below
left is printed annually in their book.
If you scroll down the Stock Trader's Almanac table, you will see how seasonality behaves during
the bearish six months and the
bullish six months. As
you can see, a $10,000 investment in the Dow stocks in 1950 only in the
bullish period grew to nearly a half a million dollars, whereas money was
lost in the bearish period.
However, if you take a closer look at the
table on the below right, you can see this approach approximates buy and
hold. You would have lost out on the 2003 bull leg by following this
model.
As you can see, there were periods when the expected seasonal patterns did
not work. The Mid-term, Quick-term, and Short-term Indicant will help you
identify these aberrant periods.
Click here
to see how to participate in seasonally aberrant bulls and avoid
seasonally aberrant bears.
