we have also added some charts exploring the Seasonality in markets at a very high level.
We have updated this post with more seasonality trends.
Seasonality in Financial Markets
Seasonality refers to particular time frames when stocks/sectors/indices are subjected to and influenced by recurring tendencies that produce patterns that are apparent in the investment valuation.
- More strong in commodities
- Broad market indicies
- Not that strong in common stocks
Tendencies can range from weather events (temperature in winter vs. summer, probability of inclement conditions, etc.) to calendar events (quarterly reporting expectations, announcements, etc.). The key is that the tendency is recurring and provides a sustainable probability of performing in a manner consistent to previous results.
Seasonality in few charts
- Overall summer months, generally positive for commodity(precious metals and agricultural commodities) space, and sideways moves for equity markets after April??
- Positive for Commodity currencies?
Seasonality in Market in years 2002/2208/2022
Given the Current Market Action, it might be Worth looking at past market correction and seasonality.
Tech heavy NASDAQ and SPY
QQQ in 2001/2002/2008
SPY in 2022/2008
Based on the past 10 years of data, silver has a positive return for the month of July, most of the time.
SPY/Broader market Index
- For SP500 Index/SPY ETF, June on an average negative month.
- For NASDAQ Index/QQQ ETF, June on an average negative month.
- Agricultural commodities like CORN, which are driven by seasonal harvest, usually end up performing negatively in the post-harvest season.
Fixed Income Markets
- TLT, which is long term US treasury notes ETF, has a positive return for most of the summer months.
Small-Cap is in Sideway pattern Since early march
Are there signs of Bubbles
We curated some of the popular Memes/twits, just for pure fun, capturing the current sentiment on Twitter, just for pure fun.
1) All the Broader market index rally, is just keeping up with the balance sheet expansion of central banks? That’s good news assuming this continues forever??
2) This popular meme below captures the current mindset of youth?
3) Dr. Partikpatecfa is recommending a portfolio with Doge/Bitcoin and meme stocks
4) Most of the central bankers and planners are in a tough spot?
5) Big tech name is consistently trying to reinvent and stay relevant, Microsoft is a good example of this.
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