Technical Seasonal Analysis

Discussion in 'Technical Analysis' started by Li Ka Shing, Dec 25, 2005.

  1. Hi,

    As we know there are seasonal factors influencing the market. Now the question/ idea it possible to have a kind of a seasonal factor as part of technical indicator and to have a chart or visual appereance of this indicator. For example, a kind of line like the RSI.

    I think this seasonal indicator can be complementary. It can be combined with other indicators when u read and analyze the technical chart. Seasonal factors do have a significant effect, but not a standalone or neccessarily very strong every time.

    Right now when I read a chart, I have to guess the seasonal effect by 'fuzzy logic' in my brain only. For example, like the year-end, month-end, or pre holiday, or pre/ after Thanksgiving week, announcement seasons, summer, etc. These seasonal factors either help to calm down/ flatten the market or move the market more.

    Now I'm not aware of any indicators I can use to have this seasonal factor more concrete and more visual as a technical indicator.

    I think it might be possible to draw and put it into visualization. From short seasonal periods like days of the week (Mondays or Fridays for example), to long ones like start or end of the year.

    It's an idea. What do you all think? What would you imagine a seasonal indicator would be like?
  2. nkhoi

    nkhoi Moderator

    aren't you too busy running your empire instead of posting here?:D
  3. Suppose the *real* LiKaShing were trading futures and were to incorporate some type of seasonal analysis. Now, normally, he'd trade 100 contracts but due to the seasonal analysis indicator being only 85% bullish, he's long only 85 contracts.

    You, on the other hand, if you are like the majority of small speculators, can only be short, flat, or long. You don't have the ability to be 85% long. This pretty much renders many indicators out there, useless for the little gambler types.
  4. What are you guys talking about? Please ignore my online nick for awhile. Let's get serious. Darn....I knew I should've chosen a better nickname, maybe Alan Greenspan is better. Then people would take me more seriously.


    I always believed everything should be technically imprinted. Im a technical analysis supremacist. But.....when it comes to seasonal factors, I have to rely on fuzzy logic. No real technical indicator. Just my old brain.

    As with other technical indicators with certain rules, like if the RSI is 80, it's too high.....if SlowStoch cross, the market would turn......I believe this seasonal factors should be made available as a real and solid technical indicator too, because seasoanals also follow certain rules. Isn't that the point of Technical Analysis?

    So to continue, come on, what do u all think? What would it look like? Im just springing an early idea. Maybe someone will jump on it and have a clearer picture.
  5. Murray Ruggiero

    Murray Ruggiero Vendor

    I have done work using walk forward seasonality for almost a decade. I have written several articles in Futures on this topic over the years as well as a chapter in my Book Cybernetic Trading Strategies on this.

    I develop during the mid 1990's an indicator called the Ruggiero/Barna Seasonal index. This is a walk forward indicator which can be used to develop mechanical trading systems. See pages 45-46 of Cybernetic Trading Strategies.

    For TradeStation users I sell a package called the "Universal Seasonal" which contains this as well as other seasonal indicators. We will be releasing an addin for TradersStudio containing these tools in 2006.