This time, the cyclic market trends were a kaput. Most simply did not pan out.
But, that really is nothing novel. If you do a 25 year graphic representation on the major indices, you will find out that a number of years simply don't happen as expected. But what you will also appreciate is that in most years, they generally do.
What does that indicate for us going into 2010?
It means that 2009 was one of those odd years where seasonality did not work meaning that in 2010, seasonality will most likely work again.
The opening seasonal trend will be upon us in just a couple of weeks, so let's do a fast review.
The stock market has quite consistent and dependable recurring trends. You should know the most prominent cyclic trends, given that this information can stop you from being overly bullish at a cyclic peak or extremely bearish at a seasonal low.
In a nutshell, the general trends favor a decline in early January (maybe profit-taking selling), followed by a mid-January rally. By late March or early April the market often reaches a peak, followed by a jerky market in mid-April, perhaps related to the April 15 tax deadline. The early summer months are regularly characterized by a midsummer rally, culminating in a market top in late July or early August. September and October are normally down months in the stock market (witness the 1929 Crash and the 1987 October decline), with the lows occurring sometime in late October (a good buying opportunity?). The trend into the end of the year is typically bullish, with the first two weeks in December characterized by a healthy market. The Christmas holidays are normally gentle, with uneven and thin markets. There are continually exceptions to these genuine trends, but the general pattern is extraordinarily consistent.
Print this article if you have to and stick it near your trading monitor. I reason that because 2009 was a unusual bust for the majority of the seasonal trends discussed above, 2010 will be an on year. One of the biggest errors amateur traders make is that they get sniped by more superior fighters who know the seasonality trends. - 31987
But, that really is nothing novel. If you do a 25 year graphic representation on the major indices, you will find out that a number of years simply don't happen as expected. But what you will also appreciate is that in most years, they generally do.
What does that indicate for us going into 2010?
It means that 2009 was one of those odd years where seasonality did not work meaning that in 2010, seasonality will most likely work again.
The opening seasonal trend will be upon us in just a couple of weeks, so let's do a fast review.
The stock market has quite consistent and dependable recurring trends. You should know the most prominent cyclic trends, given that this information can stop you from being overly bullish at a cyclic peak or extremely bearish at a seasonal low.
In a nutshell, the general trends favor a decline in early January (maybe profit-taking selling), followed by a mid-January rally. By late March or early April the market often reaches a peak, followed by a jerky market in mid-April, perhaps related to the April 15 tax deadline. The early summer months are regularly characterized by a midsummer rally, culminating in a market top in late July or early August. September and October are normally down months in the stock market (witness the 1929 Crash and the 1987 October decline), with the lows occurring sometime in late October (a good buying opportunity?). The trend into the end of the year is typically bullish, with the first two weeks in December characterized by a healthy market. The Christmas holidays are normally gentle, with uneven and thin markets. There are continually exceptions to these genuine trends, but the general pattern is extraordinarily consistent.
Print this article if you have to and stick it near your trading monitor. I reason that because 2009 was a unusual bust for the majority of the seasonal trends discussed above, 2010 will be an on year. One of the biggest errors amateur traders make is that they get sniped by more superior fighters who know the seasonality trends. - 31987
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