Discussion in 'Trading' started by efficiency, May 28, 2011.

  1. JUNE

    I don't start threads very often. There are people here advocates of back-testing. Implies mechanical rather than discretionary, an approach I don't subscribe to. Here's some stats lengthy enough to be statistically significant.

    Since 1885 the Dow Jones Industrial Average (DJIA) has been up 45% of the time in June with an average gain of 0.1%. During the 3rd year of the Presidential Cycle the DJIA has been up 58% of the time with an average gain of 1.3%. The best June ever for the DJIA 1931 (+22.3%), the worst 1930 (-17.5%)

    Since 1928 the SPX has been up 52% of the time in June with an average gain of 0.8%. During the 3rd year of the Presidential Cycle the SPX has been up 65% of the time with an average gain of 2.5%. The best ever June for the SPX was 1938 (+20.8%) the worst 1930 (-16.1%).

    Since 1963, over all years the OTC (NASDAQ since 1971) in June has been up 52% of the time with an average gain of 0.2%. During the 3rd year of the Presidential Cycle June has been up 75% time with an average gain of 2.8%. The worst June ever, 1969 (-7.4%), the best 1999 (+11.3%)

    Since 1979 the Russell 2000 (R2K) has been up 56% of the time in June with an average gain of 0.1%. During the 3rd year of the Presidential Cycle the R2K has been up 75% of the time with an average gain of 1.7%. The best ever June for the R2K, 1988 (+5.8%), the worst 2008 (-6.9%)

    That said, the SPX has been down every consecutive June since 2005. A present oscillator of new 52 week NYSE highs and lows , which I give a lot of credence to, is heading lower. A 30 day average of TRIN is also suggesting south. ADX just failed in its indication of a strengthenng downtrend (implying chop). Bollinger bandwidth is near a 6 month low and the 20 day ATR of SPY is .......eh.........kinda narrow. Attached chart suggests at support.

    I give little credence to VIX.

    New month brings institutional inflows for the first 5 days or so.

    SPY is my benchmark to beat. With a historic 0.8%, net net in theory, should be a piece of cake. I personally don't look at one minute bars and/or excite over chump change. A daytrade for me is scratching a bad entry.

    Thoughts? (meaning rational and uncited perspectives rather than one line smart ass remarks from paper tigers). We already know you're oh so clever.
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  2. "The market will fluctuate". I heard a guy who was a bit more than a paper tiger said that once.

    No, really, what's your question? You've presented a lot of statistics about history and all, but in reality the market is more like a living creature than a machine. About the only thing that it's really safe to say about June 2011 is that it won't be EXACTLY like the average June from 1885 to 2010. It probably won't even be like any of the individual Junes from 1885 to 2010. When it's over, it could be that the most analogous month was March 1964 (pulling that one out of thin air, not making a forecast). Or, it could be that when it's over we'll be talking about how there is no historic precedent for what just happened.
  3. Good post -- thanks. So overall, market goes up in June, even if it is less than other months.
  4. J.P. Morgan died the same year as Federal Income Tax and the Federal Reserve system were incepted. Coincidental. Coincidental indicators are often used to "explain" cause and effect. Past tense. As with fluctuation, it goes WITHOUT saying.

    No one on earth knows what the market "will do" on Tuesday. We all deal in probabilities.

    Stats temporarily refuted with the last (7) Junes.......... down.

    My question? The here and now. Simply put, looking for aspects I haven't considered.

    The demise of Q-E2 would be a mild one. Or a lurking 6 sigma event (your term no precedent). An indicator I haven't looked at. A shaky newsworthy company that would make a great alibi for a large gap down. Steve Jobs death would come to mind. A new earthshaking product. Definitive indication the short end of the yield curve will finally start to ascend. If Obama wants to be re-elected, a strong market would aid. He just implemented a Truth Czarina the other day. Et cetera.

    "The market will fluctuate" tells me nothing. Since price generally follows volatility, the ratio of Open to High vs the Open to Low, over a span, would tell me something.

    Random as each June of the last 126 years may be, there are probably some clues (albeit sometimes conflicting) to direction and to a lesser extent magnitude.

    In essence, looking for credible clues. Something from thee ELITE, with money at stake after an extended run from March '09. Some clarity to the conflicting indications I cited in the OP.

    I'd even settle for a decent rumor (rumour in Great Britan).
  5. The fluctuations have a specific logic, but it isn't based on calendar months, even though they can have marginal importance in determining entry points. Right now, I don't see any logical reason to be short on any timeframe that sounds relevant to you, although both the Daily and Weekly are a little ambiguous, which indicates that the timeframe above them might be shifting directional bias, in which case the reaction off the May high will turn into something greater, which makes sense given that the Monthly chart is showing greater weakness than at any point since last August's low. I don't deal with magnitude forecasts, just let the market's logic stop me out when it stops me out.

    So, if I had to make one trade at the open on Tuesday, I'd go long. If it's a Monthly timeframe trade, my stop would be below the March low. For a Weekly trade, it'd be below the low of the week of April 22nd.

    Of course, if you want to anticipate what the logic might tell you, you could go short with a stop one tick above the highs, but I don't do that personally. I'd rather react than anticipate because I know the odds when I react, but don't know them when I anticipate.

    That's all based on the SPX.
  6. Interesting that the OP see's the market at support - and that is an interesting chart by the way. To me it looked like it's at resistance ... but then I trade mechanically and only use the general market trend (which is up) to make adjustments in my trading. Given the market trend is still up it should not be a surprise if the levels I marked as resistance are broken.
  7. If I traded the spoos I would be seller, but a nibbler, on June 1. There is internal weakness in this market. But, we are still in a raging bull market in the bigger scheme. I presume u see that band of resistance between 136 and 147. But yes, this could be the start of a pull back, I would be a seller based on my chart.
  8. Wednesday the first of June, 2011.

    "The authority of a thousand is not worth the humble reasoning of a single individual."

    Galileo Galilei
  9. Handle123


    "June" means to me to check the summer box in my automated programs as I found years ago that volume based methods work differently during the summer. For manual trading ES, my stops goes up and targets go down for day trading. For long term trading Commodities, a usual most exciting time due to droughts and consumption of Meats.

    Life is good.