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The ultimate seasonal trade filter?
A very simple way NOT to get screwed by bad seasonal trades....
The following examples are a few trades from the Moore Research Center report
(www.wrci.com) during the month of January, 98...
On the day of the seasonal entry... note the high and low of that day. You
will enter on any day following where the close is...
higher than the high of the seasonal entry day for buys
lower than the low of the seasonal entry day for sells
If a buy... use the seasonal entry day low as your initial stop.
If a sell.. use the seasonal entry day high as your initial stop.
Examples:
Sell March Pork Bellies 1/11... since the 11th was a Sunday.. we look for the
high/low on Monday 1/12. As you can see it was an excellent sell signal (low
risk).. but very short term before the market bounced up.
These trades can also be filtered using the high or low from the previous
month. In the case of Pork Bellies.. the December low was penetrated to the
upside on 1/22 and the price is still above Dec low as we speak.. this does
not bode well for this seasonal trade. We could re-enter on a downward
penetration of the December low. This seasonal trade is to end on 2/18.
Sell March Soybeans 1/18...using 1/20 as our entry day.. the low was 663
1/4... it has not been penetrated!
Sell April Gold 1/19... again using 1/20 as our entry day... the low of this
day has yet to be penetrated.
Hopefully from this you get the general idea. Counter-seasonal trades could be
made using this filter in reverse.
Enjoy!
Randall
rsbcjj@xxxxxxx
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