Seasonal Stock Market Trends, The Definitive Guide to Calendar Based Stock Market Trading.


Virtually everyone is familiar with the concept of a season. We can start with winter, spring, summer, and fall. Add in hunting season, football season, mating season, hurricane season, holiday season, and so on. Factor in “a season for all things,” “now is the season of our discontent,” “the seasons changed and so did I,” and you start to get the idea.

In a nutshell, in many aspects of life things occur in a repetitive pattern. Spring follows winter, then summer, fall, and then winter again. Things do in fact change over time. Yet, the basic underlying idea of seasons and seasonality is that although things do change, they often return to a particular state over and over again—often in a very cyclic and predictable way.
Over time, the human mind comes to understand the cyclic or seasonal nature of certain occurrences and begins to adapt. In the old days in coldweather climates—before the advent of heat and running water—humans used to gather up provisions as the fall progressed to ensure that there would be enough food to last the winter. Nowadays, many individuals in cold-weather climates use the beginning of baseball spring training in February as something to latch onto to help get them through the remaining cold months of winter and to remind them that better (or at the very least, warmer) days are certainly ahead. Today, many people living along the Atlantic Ocean or the Gulf of Mexico make preemptive plans regarding the potential for hurricanes during the late summer and fall months.

So what, you might ask, does any of this have to do with the stock market? I mean, certainly, one might be willing to grant the notion that weather-related seasonal trends could have an impact on commodities and grains. Things that grow in the ground or that eat the things that grow in the ground clearly can be affected if the ground is too wet or too dry (or covered with three feet of snow) and does not allow for the normal planting process to proceed. But the stock market is primarily based on financial assets, not physical assets. As long as the New York Stock Exchange has electricity, the nature of the weather outside is seemingly irrelevant. And the Nasdaq market doesn’t even operate a physical exchange. So, here too, the vagaries of weather and seasons would at first blush seem to be quite irrelevant. But the reality is that there is more to cyclicity, seasons, and seasonality than mere weather.

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