Seasonal Stock Market Trends

Jay Kaeppel (Naperville, IL)?is a successful trading strategist for Optionetics, Inc., and has a weekly column titled "Kaeppel's Corner" in which he writes on a variety of trading topics for www.Optionetics.com.? Jay has been profiled in Futures magazine, and Barclays Managed Accounts Report, and is author of The Four Biggest Mistakes in Futures Trading, Four Biggest Mistakes in Option Trading,?and The Option Trader's Guide to Probability, Volatility and Timing,?all of which have achieved the Top 10 List at www.traderslibrary.com. With 18 years of programming experience, Jay has written a variety of software programs, most notably "Option Pro" trading software, voted "Best Option Trading System" six consecutive years in Technical Analysis of Stocks and Commodities Magazine.? As Director of Research for Essex Trading Co., Ltd. (1989-2004), he served as a software developer and trading systems designer, and until 2003 he managed futures trading accounts as a CTA,?registering seven consecutive profitable years.? He earned his Bachelor of Business Administration degree from Western Illinois University in 1981.

• Preface xiChapter 1 Introduction to Seasonality in the Stock Market 1The Concept of Seasons and Seasonality 2What Is Seasonality? 5The Pioneers of Stock Market Seasonality 7Measuring Market Performance throughout This Book 9How to Trade the Dow 11Seasonal Trends to Consider 14Summing Up 18Chapter 2 The Month of January 21The First Five Days of January 22The Last Five Days of January 25The January Barometer 27The January Barometer as a Stand-Alone System 29The JayNewary Barometer 31The Ultimate January Barometer System 38The Effect of Compounding 42A Few Words of Warning 46Summing Up 47Chapter 3 Holiday Seasonal Trends 49The Holidays 50The Trading Day before Each Holiday 51Two Days before Each Holiday 52Three Days before and after Each Holiday 54The Best Holiday Trading Days 56The Ultimate Holiday System 61The Most Wonderful Week of the Year (Usually) 63Summing Up 65Chapter 4 Monthly Seasonal Trends 67The Best Day of the Month 68The Trading Days of the Month 71The Worst Trading Days of the Month 80The Best Trading Days of the Month (Part 1) 81The Best Trading Days of the Month (Part 2): The Month-End/New-Month Pattern 83The Most Wonderful Time of the Year 89Monthly 10 Combined with the Santa Claus Rally 91The Ultimate Monthly Days System 93One Last Tweak 96Summing Up 100Chapter 5 Yearly Seasonal Trends 103Decennial Patterns (Part 1: Ranking the Years) 104Decennial Patterns (Part 2: The Best and Worst Years) 106Decennial Patterns (Part 3: The Decennial Road Map) 110Decennial Tendencies 111Decade-by-Decade Performance 112Intradecade Trends of Note 123Intradecade Cycles Combined 130Summing Up 136Chapter 6 Repetitive Time Cycles of Note 139The 212-Week Cycle 140The 40-Week Cycle 146The 53-Day Cycle 153Combining Cycles 163The Ultimate Time Cycles Model 168Summing Up 172Chapter 7 Election Cycle Investing 173The Election Cycle: By the Years 175The Election Cycle: By the Months 187Two Other Patterns in the Election Cycle 205The Ultimate Election Cycle System 210Summing Up 214Chapter 8 Sell in May and Go Away 219November to May 220What Is MACD? 225Using MACD as a Filter 227October through June for the Nasdaq 238The Dead Zones 246The Easiest Market-Beating Strategy in the World 260October of Year 7 261Summing Up 264Chapter 9 Putting It All Together 267Building Seasonal Trading Models 268Building the KTI 271Comparing Extreme KTI Readings 273Model 1: The Long-Only Method 276Model 2: The Long-Only Plus Leverage (LOPL) Method 278Model 3: Jay’s Ultimate Seasonal Barometer 281Summing Up 284Index 291