Below, we chart the seasonal behavior of the XCI index from 1984 to the second quarter of 2004.  It's a high-tech index with an inception date that goes back to the mid-80's.

We place special value on this index because it contains a generally volatile selection of stocks.  As we've noted in the past, the movement of particularly volatile stocks sometimes gives clues as to the future movement of the broader market.  In fact, our own tests show that the daily moves in the XCI give a good indication of tomorrow's market move (roughly 60% of the time the XCI goes up, the broad indices go up the following day).

The first group of tables show the movement of the index over the course of a year.  Very roughly, the seasonal behavior parallels that of more general indices (like the Dow).  Note, however, the steep slope at the beginning of the year...these stocks really outperform in early January.  Another observation would be the tendency toward losses in the third month of a quarter.

Potential investors should utilize our seasonal charts in conjunction with other indicators of future success.  Our tests do seem to indicate that these charts can increase the likelihood of profitable trades, but these charts certainly should not be taken as the "end all and be all" of successful trading.

The yearly seasonal charts are compiled by simply averaging all historical percentage gains/losses for the first day of the year, second day of the year, etc.  The quarterly and monthly charts are compiled in similar fashion, but this time we overlay the days of the quarters and months, as opposed to days of the year.  The quarterly charts are particularly useful when viewed in light of quarterly earnings and dividend milestones.

Feel free to request additional charts (in moderation):  khodge @ stockwarrants.com .

For more background and caveats on our charts, visit our main "seasonal charts" page.

Copyright © 2008 MarketSynopsis.com. All rights reserved.