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Archive for December 13th, 2009

This time, the recurring market trends were a kaput. Most simply did not pan out.

Nonetheless, that actually is not anything new. If you do a 25 year graphic representation on the main indices, you will find out that a number of years basically do not work. However what you will also notice is that in nearly all years, they commonly do.

What does that represent 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 once more.

The initial seasonal trend will be upon us in just a couple of weeks, so let’s do a fast review.

The stock market has reasonably consistent and reliable recurring trends. You ought to be aware of the most well-known cyclic trends, since this information can prevent you from being overly bullish at a seasonal peak or too bearish at a seasonal low.

In a nutshell, the common trends support a decline in early January (possibly profit-taking selling), followed by a mid-January rally. By late March or early April the market often reaches a peak, followed by a changing market in mid-April, perhaps related to the April 15 tax deadline. The early summer months are frequently characterized by a midsummer rally, culminating in a market top in late July or early August. September and October are usually down months in the stock market (witness the 1929 Crash and the 1987 October decline), with the lows taking place 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 robust market. The Christmas holidays are usually calm, with uneven and thin markets. There are continually exceptions to these actual trends, but the overall pattern is extremely consistent.

Print this article if you have to and stick it near your trading monitor. I believe that because 2009 was a rare bust for a good number of the seasonal trends discussed above, 2010 will be an on year. One of the principal mistakes amateur traders make is that they get sniped by more superior fighters who know the seasonality trends.

To find out the exact method of how a pro stock trader has made more than 100 million refer to short term stock trading and for plenty of useful stock trading training, remarks, picks and a bundle more, see how to trade stocks

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