How To Trade Stocks Appropriately During Distinctive Times Of The Year
This time, the seasonal market trends were a kaput. Most simply did not pan out.
Nonetheless, that actually is nothing novel. If you do a 25 year chart on the major indices, you will establish that some years simply do not happen as expected. However what you will also establish is that in most years, they typically do.
What does this mean for us going into 2010?
It means that 2009 was one of those unusual years where seasonality did not work meaning that in 2010, seasonality will probably work once more.
The opening cyclic trend will be upon us in just a couple of weeks, so let's do a fast review.
The stock market has rather consistent and dependable recurring trends. You must know the most well-known recurring trends, since this information can prevent you from being too bullish at a seasonal peak or overly bearish at a seasonal low.
In a nutshell, the common trends favor a turn down in early January (perhaps profit-taking selling), followed by a mid-January rally. By late March or early April the market often reaches a peak, followed by a choppy market in mid-April, perhaps related to the April 15 tax deadline. The early summer months are often 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 robust market. The Christmas holidays are typically quiet, with irregular and thin markets. There are continually exceptions to these legitimate trends, but the general pattern is remarkably 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 nearly all of the seasonal trends discussed above, 2010 will be an on year. One of the main mistakes amateur traders make is that they get sniped by more sophisticated fighters who know the seasonality trends.
To learn the meticulous system of how a professional stock trader has made more than 100 million refer to short term stock trading and for heaps of priceless stock trading materials, commentary, picks and a bunch more, see how to trade stocks
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