Stocks

 


 

  • Seasonal Possibility (source Seeking Alpha):

           Seasonality will normally have the following pattern:

September/October-February: Improving stock markets from September/October through to the end of the Q4 reporting window in February. This should be accompanied by a pickup in the economy as supported by better consumer sentiment and an improving wealth effect.

March: After the end of the Q4 reporting season there should be consolidation or a market pull back, especially when consumers are paying higher gas prices brought about by the economic uptick. Because year-end reporting requirements are more cumbersome than for other quarters the year-end reporting window finishes about 3-4 weeks later than other quarters. Consequently, the gap between Q4 and Q1 reporting windows is short. This helps explain why any market pull-back between these two reporting windows is generally transient and modest. By the same token investors should be strongly aware that any pull-back in this window is a very clear forewarning about a bigger pull-back that will occur during the longer lasting gaps between Q1 and Q2 and between Q2 and Q3.

April-May: Strong stock markets once again for the Q1 earnings season in April and early May. Investors should sell into strength during this period. Don't be greedy, sell early and stay out.

May-September: Thinly traded and generally weak markets. Expect confirmation that high gas prices are hurting consumers which, in turn, will slow the economy and hit stock prices. In late June or early July investors may find that the summer pull-back is overdone and that they can make profitable trades into the July earnings window. However, this is a short-term play and dangers abound.

September/October: Look to buy beaten down stocks to play the entire cycle again.

 


 

 

 

 

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