Chapter IV: The Traditional Seasonal Analysis of Price Trends can still yield valuable predictive information. |
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| Walt Disney is typical in having low prices in the months of Autumn. The percentage spread between the high and low months is 8.46 percent, when averaged over the last 30 years. 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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| DIS speculators might well avoid the month of September. 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. By this measure, the month of January appears favorable, offering a quick return averaging 6.11 percent. |
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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 Walt Disney during December have seen an average maximum gain of 19.04 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 8.46 percent from October to the next May. This is 14.50 percent when converted to an annual return. Investing 'against the tide' of the seasonal trend can cost an annualized 20.30 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 DIS roadmap and Summary of most effective indicators: |
| Monday, February 08, 2010: We have news on American International Group, Inc., ticker symbol AIG. Some signs of an over-sold condition have become evident. Also, there are breaking events concerning Marathon Oil Corporation and Pactiv Corporation. From the News Archive: (2/5/2010 ) Favorable events happened at Regions Financial Corporation and Wells Fargo & Company. Meanwhile, bad news came from Genzyme Corporation and Archer-Daniels-Midland. |