Let’s start with a simple examination of the rich history of S&P data that’s available to us.
It’s usually not too difficult to find the data, but it can be more difficult to find it in a format that’s both easy to read, interpret, and identify patterns in. The first topic I’d like to delve into with you is a statistical analysis of available market data. I’ll do my best to simplify the information and, as always, include lots of graphs and pictures to help you through the learning process. That being said, I hope your first foray into seasonality and sector rotation will be both exciting and profitable for you. My fascination with the puzzle of inter-market correlation and analysis has grown to the point where I think I’ll need to enter a 12 step program to quit this stuff. These days, I love studying economics and business. That was before I understood that a strong grasp on seasonal cycles and sector rotation could be converted into cold hard cash. It wasn’t that the content and concepts were that difficult, rather at that time in my life, they were painfully boring to me. I hit the books I purchased a printed copy of the stock trader’s almanac (back in the days before the content and data were delivered in an online format.) and dove headlong into my studies and emerged months later with both a white flag and a migraine headache. I was relatively new to trading and still very much in that stage of discovering all of the things I didn’t know that I didn’t know. The first time I tried to wrap my head around sector rotation and seasonal cycles, my head almost exploded. This week I’ve had the conversation of sector rotation and seasonality a couple of times and thought it would be the perfect topic for this week’s newsletter. Each time the opportunity arises to write the newsletter, I look to the discussions I have with each of you and in the classroom for inspiration.
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