Today was a typical Saturday. I began to scan my watchlist, ran through the indexes and flipped through my favorite web pages for tidbits of stockmarket insight. At one point I noticed that in wake of yesterdays selloff in gold/silver, suddenly people were posting seasonal charts for gold and silver.....as if they had just been discovered. Helllllo McFly. No, there is no seasonal demand for the shiny stuff here. Hasn't been; move along. Economies are healing; meaning there's less of a need to hedge yourself with gold and bonds. With no demand and less of a flight to safety,the big boys are taking profits. Again, nothing there, move along.
I think some people just stopped paying attention but world economies are less bad, period. While we're not out of the woods, unemployment is stabilizing. Jobs are coming back, albeit slowly and low paying...but things are no longer deteriorating. Maybe the gurus out there just didn't want their subscribers to know the secret to their approach (wink wink). Some struggled attempting to get long the shiny stuff and wait for a pop allthewhile wondering why gold wasn't skyrocketing to $2500 (as some pundits have predicted), we stood aside focusing on better areas to deploy our cash.
You see, we talk about seasonal demand a great deal at StockBuz.net using it to enter quite a few trades throughout the year; and you don't have to trade commodity futures in order to benefit. That's why the trading Gods made ETFs. Utlizing past history, we know what the odds are of success. We know what commodity or sectors are coming into strength and make efforts to position accordingly. Fact is many a trader has cleaned up on seasonal patterns and have penned books on it's usage. Don't get too excited however; it's not the holy grail of investing dear reader. Don't even go there - there is no such thing. At times it doesn't "work" if there's a change in sentiment or trend, over (or under) supply of a certain commodity due to unforeseen circumstances such as drought or worker strike and then there's those pesky, panicky news headlines (Greece is about to fail!); just to name a few. However quite often when market sentiment is right, there exists great reward when technical analysis is telling you otherwise......all because seasonal demand for a commodity (or yes, even a sector) kicks in.
We discussed in November/December that XLF would run for $19.50-20.00; that energy would strengthen, gasoline would run, OIH breakout and small caps to take the lead. They did. We talked about Platinum and industrials. We didn't wait for a guru to post a chart. We have a plethora of seasonal charts at our disposal. We have no "gurus" with subscription fees @ StockBuz; everyone shares their knowledge. We knew the seasonals and 2013 is off to a rip roaring start. Maybe some of you need to brush up on your seasonal knowledge.....or better yet just join us.