Wednesday, February 26, 2014
Some seasonality charts for you
In case you believe at all in playing balance of probabilities with seasonality plays, and you were wondering what does what over the next couple months:
Gold normally pukes at end of Feb and doesn't recover til a short (possibly not even playable) rebound end of April. August to February is really the obvious place to own this chart.
What's different this year? I guess gold should go up in expectation of a Modi victory in India. However, if Wall Street Whitey were smart, he would have already taken his long position. So I'd personally expect gold these next few months to underperform its 20 year average.
Miners are nowhere worth being until end of April, according to this chart.
What's different this year? I guess the miners were already puked into oblivion in December, so there might not be as many people left to sell. But then again, the people who bought in December and January might be happy to sell now and lock in gains, no? So it's a wash whether you should expect miners to underperform or overperform this chart - I guess it depends more on the price of gold's under- or over-performance this year.
Strangely, NASDAQ is also a worthless place to be in March and early April over the past 20 years.
What's different this year? Well, the Q was already bid up these past several months, in anticipation of Rosenberg's future capital investment & new dawn of technology play. So I guess you should expect Q to underperform its long-term average this spring.
Well check that out! SPY starts taking off right about now!
What's different this year? Everyone's freaking out because of the bad economic reports coming out of the US. But that was all weather-related: Michael Shaoul in particular has been very blase the short-term data and has remained very constructive USA longer-term. So I'd expect SPY to at least match the above average performance, or even do better, over the next few months.
NOTE: I hope you understand why I'm not only looking at the seasonal average behaviour, but also asking "what's different this year".
It's because it's silly to expect this year's performance to mimic the 20-year average chart exactly. But it's not so silly to ask "well, should this year be better than, or worse than, the 20-year average?" Asking what's different from the average situation this year seems like a balance-of-probabilities good way to predict that.