Chapter IV: The Traditional Seasonal Analysis of Price Trends can still yield valuable predictive information. |
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| A non-typical Seasonal Pattern is shown by AutoZone, Inc.. The more usual seasonal pattern has the low prices during the pre-winter months. Averaged over the last 19 years, AZO exhibits a strong spread between the high and low months of 14.39 percent. For this chart, price plots for each year are traced on top of each other. Each month's value is adjusted to the mean price for the particular year. The orange line represents the average monthy price expressed as a portion of the annual price. |
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| Investors in AutoZone, Inc. should consider staying in cash during January. Here, the profitability of the month is defined as the percentage change between the mean price on the first day of the month and the mean price on the last day of the month. So the figures displayed here refer to the average change during each month, rather than changes between months. A quick 5.37 percent gain has rewarded those who have speculated during the month of December. |
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| The 'Monthly Profitability' discussed above applies to holdings during the course of a single month. Another, perhaps more realistic evaluation is the one charted here. Here the value evaluated is the highest price reached at anytime during the next quarter. Investors shrewd enough to invest in AutoZone, Inc. during October have seen an average maximum gain of 17.9 percent at some time in the following 60 trading days. |
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This plot of the average monthly price as a proportion of the average yearly price removes the year-to-year secular trend. However the within-year trend is still intact, so it is expected that the December value might be higher than the January average, for a healthy company. The potential gain has been 14.39 percent from January to the next December. This is 15.70 percent when converted to an annual return. Investing 'against the tide' of the seasonal trend can cost an annualized 172.68 percent. Before making any decisions based on the standard 12 Month Seasonal Calendar, be sure to check the characteristics of the 24 Month Political Election Calendar. Research shows that many characteristics of the traditional seasonal averages are actually induced by events in the 24 month political cycle, so the characteristics of even versus odd numbered years may be quite distinct. |
Much Deeper Market Timing Analysis with AZO roadmap and Summary of most effective indicators: |
| Wednesday, March 17, 2010: We have news on Walmart, ticker symbol WMT. Signs of an over-bought condition have become noticable. Also, there are breaking events concerning ACM Income Fund and CIGNA Corporation. From the News Archive: (3/17/2010 ) A favorable event happened at LoJack Corp. Meanwhile, bad news came from Prudential Financial, Inc., Patterson Companies, Inc., and General Electric. |