Technical Analysis Plain and Simple: Charting the Markets in Your Language, Second Edition

Seasons

Seasonality is simply a time cycle based on the calendar and not the market alone. Each year, there are planting and harvest seasons in agricultural markets, peak demand seasons for energy products, and even times of the year when stocks see tendencies to rise or fall. There is nothing mysterious here, but a lot of attention is focused on seasons, so they warranted a special mention here.

“Sell in May and Go Away” is a commonly used slogan for the stock market, but it is simply based on the idea that the summer months fare worse than the winter months in terms of historical stock performance. It can be summer vacations keeping investors away from the markets, reduced cash flowing into mutual funds because there are no year-end bonuses, ...