Market Timing Research

The world seems to hate Goldman Sachs right now. Rarely have I seen such vehemence, except perhaps the hate for Monsanto and its business practices which seem, to an astute observer, possible even more dangerous than what cretaed our banking crsisis.

In the case of Goldman, I suppose all that greed eventually catches up with you. With the threat of a government lawsuit that hit the firm by surprise, the stock stumbled taking Wall Street with it. But the seasonals suggest that this may soon present a great bargain hunting bottom.

Goldman Sachs Trend Projection

I spent two months in China recently and can only confirm what I always say. This century will belong to the Chinese. This is coming from someone who has lived there and visits once or twice a year for a month or so each time, talking to countless politicians, businessmen, monks, factory owners, professors, students, military men … you name it.

I’d throw in Brazil and India as two other coming powers because they also will be producers and exporters, and can grow their middle class of consumers which as yet do not have access to lots of consumer credit. Nevertheless, in my view China will be king.

China is becoming the world’s manufacturing capital before our eyes and will be that in the near future. We cannot stimulate jobs but they can. They can export. They can close in on themselves and develop internally without need of exports. They’re not shackled with expensive health care burdens, nor with union problems or expensive labor (yet) nor expensive foreign wars. Naturally they have other probems and one that I’d worry about is the potential for political problems around 2012…

China ETF Trend Projection

As to the rest of the US market …

S&P 500 Index Weekly Trend Projection

Dow Jones Industrial Average Trend Projection

NASDAQ Index Weekly Trend Projection

Click here to get more NASDAQ stock trend projections …

And make sure to let me know if you have any questions on these projections – or if you’d like more of these videos or heck, just leave me a comment so I know you’re alive =).

Click here to find out how to get all of the S&P 100 Factor Seasonal Projections each and every month

The Down Jones Annual Seasonal Trends

Here’s a look at the Dow Jones Index’s annual seasonal trends.

This is a simple seasonal chart, not one of the Factor Seasonal Trend charts for the Dow.

It’s clear from this chart why so many traders hold to the maxim, “Sell in May and go away.”

Because the six most bullish months of the average year are November, December, January, March and July.

Most of these reflect months when larger amounts of cash flow into the market. One explanation of the Dow Jones’ spring rally is that investors become flush with cash after the close of the fiscal year when businesses get their final profit numbers for the year… bonuses are paid out … and tax refunds are issued.

The November-December bullish bias is often attributed to what happens at Wall Street’s fiscal year end on September 30th. Many mutual fund accounts automatically re-invest dividends at the end of the year at the end of the fiscal year – sending an ocean of money into the market at the same time of year.

Plus, this is when mutual funds distribute capital gains and dividends. All this money going back out into the hands of investors gets flooded into the market and driving it up.

But we see the summer months in the Dow Jones Index, which lack a major influx of cash, trend sideways.

These driving forces of the market explain why it’s so important to examine the Factor Seasonal Trends,  like the Business Cycle Factor Seasonal Trend which shows how the Dow Jones, other major indexes and individual stocks trend in recessions compared to expansions.

Because in recessions, the money driving up the bullish months is limited, reduced or altogether removed cutting the legs out from under traditional rally periods.

Without examining the Factor Seasonal Trends and tracking and analyzing whether the Dow Jones and other indexes are CURRENTLY following their established seasonal trends traders are essentially flying blind.

When the data is available, why not use it?