Stock Almanac 2007

I recent purchased The Stock Trader's Almanac 2007 edition (Amazon link). I owned a much older copy. Personally, I consider seasonal factors are down the list as far as effective indicators, behind earnings (fundamentals), and technical chart patterns, and sentiment.

However, I believe that traders can still use seasonality, sometimes to good effect. I recently mentioned looking for stocks making new lows in late October and late December. The reason for this still stands, institutions and individuals selling to take their losses. Many other seasonal patterns are still effective. Every year the writers and editors of the almanac update and reexamine hundreds of these seasonal patterns.

Sometimes it backfires, as it did this September in gold. September is seasonally one of the strongest months for gold, and in 2006 it turned out to be one of the worst in recent memory. However, like I said, seasonal factors are one more thing to look at, and if everything lines up just right, that perfect storm can get an added boost from seasonality.