1. Same story, different day...........year ie more of the same fiat floods the world
    Dismiss Notice
  2. There are no markets
    Dismiss Notice
  3. Week of 6/24/2017 Closing prices & Chg Over Last Wk---- Gold $1256.40 Silver $16.64 Oil $43.01 USD $96.94
  4. "Spreading the ideas of freedom loving people on matters regarding high finance, politics, constructionist Constitution, and mental masturbation of all types"
    Dismiss Notice

Sell in may and go away?

Discussion in 'PM Trading/Stocks/Technical Analysis' started by JayDubya, May 19, 2016.



  1. JayDubya

    JayDubya Platinum Bling Platinum Bling

    Joined:
    Apr 5, 2010
    Messages:
    4,022
    Likes Received:
    3,928
    Trophy Points:
    113
    http://www.marketwatch.com/story/gold-it-turns-out-has-a-seasonal-pattern-of-weakness-2016-05-17

    Opinion: Gold, it turns out, has a seasonal pattern of weakness

    We’re now in the middle of a period in which bullion tends to perform poorly

    [​IMG]
    CHAPEL HILL, N.C. (MarketWatch) — Gold is in the middle of its six-month seasonally unfavorable period.

    That period began in March and lasts through August, as you can see from the chart at the top of this column. It’s analogous to the stock market’s six-month time frame that goes by the name of “sell in May and go away.”

    In gold’s case, though, it starts (and ends) two months before equities, so perhaps we should call it “sell in March and go away.”

    I’m bringing this seasonal pattern to your attention because it’s an additional explanation for the three-month trading range in which gold has been stuck since February. In my column last Friday, as you may recall, I pointed to unfavorable sentiment as one cause. Seasonal patterns appear to be another.

    Since gold began trading freely in the U.S. in the early 1970s, bullion has produced an annualized return of only 1.2% in the March-August period, versus 13.4% in the other six months of the year.

    Gold’s seasonal headwinds this time of year were a topic of conversation at last week’s Las Vegas MoneyShow. Doug Fabian, editor of the Successful ETF Investing newsletter and one of the speaker’s at that event, noted those headwinds and advised clients “to be prepared for a bit of short-term turbulence” in gold and gold-mining stocks. However, he remains bullish on the sector for the longer term.

    How strong a statistical foundation is there for gold’s “six months on, six months off” seasonal pattern? To find out, I fed gold’s monthly returns since the early 1970s into my PC’s statistical software. It found the seasonal tendency to be significant at the 95% confidence level that statisticians often use to conclude that a pattern is genuine.

    The past 12 months have been a good illustration of that tendency. In 2015’s seasonally unfavorable period (March through August), bullion lost 6.5% of its value. In contrast, in the six-month favorable period that began last September and lasted through the end of February, bullion gained 8.8%.

    One thing missing, however, is a plausible explanation for why that pattern should exist in the first place. The only seasonal factor I’m aware of traces to Indian jewelry demand: Indian couples often schedule their weddings to coincide with the festival of Diwali, which occurs in mid-October to mid-November.

    Still, as strong as this factor might be, it’s hard to see how it accounts for all of gold’s six-months-on, six-months-off pattern.

    For now, though, you may not care whether gold’s trading range is due to unfavorable seasonal tendencies, unfavorable sentiment or both. Either way, it means gold is unlikely in coming weeks to mount a sustainable rally.
     
  2. the_shootist

    the_shootist The war is here on our doorstep! Midas Member Site Supporter ++

    Joined:
    May 31, 2015
    Messages:
    14,131
    Likes Received:
    13,929
    Trophy Points:
    113
    Occupation:
    Oxygen Breather
    Location:
    Somewhere out there!
    Why don't I just buy in March and sell in September?
     
    Usury likes this.
  3. JayDubya

    JayDubya Platinum Bling Platinum Bling

    Joined:
    Apr 5, 2010
    Messages:
    4,022
    Likes Received:
    3,928
    Trophy Points:
    113
    Seems like at least one of us on this forum is comfortable in his chart reading skills.
     
    Usury likes this.

Share This Page