Market Timing | NOV 1998
Seasonal Stock Index Trades by James Greenwood
Here are different seasonal strategies for trading the Value Line Index compared with the New York Stock Exchange Composite Index and the Standard and Poor's 500. Most stock market traders are familiar with the January effect, which is the tendency for smaller issues to outperform blue chips at the turn of the year. But January is certainly not the only time the stock market exhibits seasonal tendencies with the potential to be exploited in trading strategies. In fact, with the January effect apparently fading in recent years as it becomes better known, this may be a particularly good time to explore other seasonal trading opportunities. One of the simplest ways to exploit seasonal market tendencies is through trades in stock index futures contracts. Using futures, a trader can in a single transaction buy or sell an index representing a large basket of stocks. With the introduction in recent years of a number of new futures contracts on different indices and in different sizes, the trading possibilities are greater than before. To research strategies, however, only three product lines have a history extensive enough to draw upon for long-term analysis — contracts based on the Standard & Poor’s 500 index, the New York Stock Exchange (NYSE) Composite Index, and the Value Line. These three indices are each unique in market representation and thus present unique seasonal spread trad-ing opportunities.
by James Greenwood
Technical Analysis of STOCKS & COMMODITIES
The Traders’ Magazine since 1982
has had over 1,226,237 subscribers from 174 different countries.
37,000 Page Traders’ Archive for $89.99
To continue reading, sign-up for trial access to Traders.com and the S&C Archive — 37,000 pages of trading ideas!
After verifying your email address, you will have limited access to the S&C Archive, as well as access to a Digital Edition of S&C, and access to Traders.com Advantage and Working Money for 30 days.
Not a subscriber to Technical Analysis of
STOCKS & COMMODITIES magazine?
Click
here to subscribe, or request
a trial subscription.
Log-in now to view articles from the S&C Archive.
Your Subscriber ID is located at the top of your magazine label, highlighted here in red.
Your last name can be found on the second line, highlighted here in blue.
*If you have a company name on the label, that can also be used. It will appear below your name on the label.
If you do not have a Subscriber ID on your label, you can find it on your statement or renewal form.
For help locating your Subscriber ID number, please call us at 1-800-832-4642 or send an email to Survey@Traders.com. If sending an email, please include your name and mailing address.