Comments on: Tech Talk for Thursday November 12th 2009

By: Ralph

Ralph — Fri, 13 Nov 2009 16:53:30 +0000

Good Day Don,

Is there still a seasonal play in uranium? If not, is there an ETF with the exposure? Thank you for your expertise and the wonderful site. Cheers! Ralph.

By: Don Vialoux

Don Vialoux — Fri, 13 Nov 2009 02:09:15 +0000

Hi David. According to Thackray’s 2010 Investor’s Guide, the periods of seasonal strength for the oil sector are from February 25th to May 9th and from July 24th to October 3rd.

By: Don Vialoux

Don Vialoux — Fri, 13 Nov 2009 02:06:39 +0000

Hi Sharon. Information from “The Encyclopdia of Commodity and Financial Spreads” is one source from a respected commodity trader in the U.S.. Tech Talk has not verified data in this report and is unable to duplicate charts offered in the book. Another example of an unverified source is http://www.seasonalcharts.com. Direct access to data used in these studies is not available. All of these services tend to provide similar historic trends (e.g strength in crude oil from February to May and strength in gold in August and September). However, each of these studies shows discrepancies and some, in the case of natural gas, are very different. Most of the discrepancies can be explained by the period that is used for the study. I prefer to use verified data focusing on 10 year and 20 year periods that also includes data during the horrible September 2008-March 2009 period. Brooke also uses up-to-date data that includes the the September 2008 to March 2009 period. Seasonalcharts.com used data up to March 2007 and the Encyclopedia used data up to 2005. All of these studies are useful, but studies based on older data is less relevant. Seasonal influence can vary slightly over time. A good example is fluctuations in my reports on sectors published annually at the end of May. One report will identify the bottom of a sector in say the end of September. The report on the same sector in the following year may identify the bottom of a sector in October. In reality, the bottom occurs in the middle of October and recent data has shifted the indicated bottom slightly in favour of October. Next year, the data could revert to a September bottom. Seasonality is useful as a starting point for determining optimal entry and exit points. It provides an average optimal date over a long period of time to enter and exit. The next steps include fine tuning the entry and exit points each year using technical analysis and an examination of the annual recurring reasons why the period of seasonal strength works. Examples of how to use the technicals to fine tune entry and exit in a seasonal trade are offered in tomorrow’s Tech Talk.

By: Mills

Mills — Thu, 12 Nov 2009 18:08:33 +0000

Shawn, I understand that the 2 studies have differnt time frames and I appreciate you pointing it out. But that makes the seasonality for Natural Gas completely off, one says to sell end Dec and the other says to buy end Dec !! which one do we follow ??

Don your help needed here !!

Thanks.

By: David

David — Thu, 12 Nov 2009 16:40:08 +0000

Also Don is the above the 10 year study or is it the 10 year and the 15 year respectively?

By: David

David — Thu, 12 Nov 2009 16:37:35 +0000

Hi Don,

From the above periods,Does crude oil do well from mid July to mid Oct. than again from end of Feb. to mid May? am I reading this correctly?

By: Shawn

Shawn — Thu, 12 Nov 2009 16:34:21 +0000

Mills – Don states “The main difference between seasonal studies done by this book and seasonal studies done by Tech Talk is the study period. Tech Talk’s studies use 10 years of data and data is constantly rolled over as available. The book uses 15 years of data from 1991 to 2005.”

By: Mills

Mills — Thu, 12 Nov 2009 15:38:46 +0000

Hi Don,

the periods above are very different from the ones by Tech Talk or Brooke, eg Natural Gas above says from end dec to end may, but as per your site it was from end sep to end dec for cdn natural gas, can you please clearify this.

Thanks

By: sharon

sharon — Thu, 12 Nov 2009 14:01:02 +0000

Don, would you please provide an example of the trough and peak for one one of the commodities – say Natgas? I want to make sure I am reading the list properly.

Thanks for your daily analysis and comments,