Hi Everyone,

The stock markets have some perceived seasonality to them as you do statistical analysis on the markets.  Does that make a usable way to time the market?  These seasonal reoccurrences include:

• Up market from Thanksgiving to Christmas, and then continue into March
• Summer being a slow season
• Markets usually down in October

There are certainly some more.

Looking at these facts, will the market rally over the coming five weeks or defy expectations?  The holiday season has a bullish bias with 64% of the years sporting a positive return.  On the other hand, economic and technical indicator point toward a lower market.

October 2009 was a decent month with the markets being up a few percentages for the month.  This has defied statistics.  The question we are facing right now is whether the markets are behaving the way they have over the past decades, or are we temporarily experiencing a different kind of market.

For investors that subscribe to the contrarian point of view, this is certainly something to consider.  There is a bullish sentiment in the market, similar to June 2007.  In one out of three years, the markets are down between Thanksgiving and Christmas.  All the optimism might be a strong good indication to lock in some profits, but then there might be more to come. Therefore, the call is yours.

After Christmas, I will revisit this issue and see what happened.

Cheers,

Patrick