Summary
Updated yearly since 1979, this comprehensive book features charts for:
(Feeder Cattle, Live Cattle, Live Hogs, & Pork Bellies)Meats
Grains (Corn, Oats, Soybeans, Soybean Meal, Soybean Oil & Wheat)
Metals (Copper, Gold, Palladium, Platinum & Silver)
Tropicals (Cocoa, Coffee, Orange Juice & Sugar)
Fibers (Cotton & Lumber)
Energies (Crude Light, Heating Oil, Natural Gas & Unleaded Gas)
Currencies (British Pound, Canadian Dollar, Deutsch Mark, Euro Dollar, Japanese Yen and
Swiss Franc)
Financials (Treasury Bills, Treasury Bonds, Treasury Notes & S&P Index)
How to Read the Seasonal Futures Charts
Please note the sample chart indicating the meaning of each chart item. Here is a general overview of each chart.
1. This line lists the contract month and market that is plotted below.
2. Years covered for this seasonal chart are shown accordingly. For example 67-96 means that these years were used in preparing this chart. Where a market has not been actively traded for too many years, there is less of a database, and therefore less reliability
3. Scale is the normalized rate of change index that is used as a reference point. The scale values are not shown since they would be essentially meaningless inasmuch as they are of no specific value in using the seasonal trends other than to indicate average magnitude of change.
4. Percentage of Years Up/Down and Arrows show the weekly percentage of time up or down on a percentage basis, for the specific week number limited under the percentage reading. If reading is +75%, for example, then this indicates upward seasonality. Percentage readings from +60% to +100% indicate reliable bullish seasonals and percentage readings from -60% to -100% indicate reliable bearish seasonals. Arrows up mark strong periods of bullish seasonality and arrows down mark periods of bearish seasonality.
Note also the following conditions:
a. Plot is Down and Percentage Reading is +60% or Higher: This means that the market tends to move Up during this approximate week more years than it moves down, however, the usual down move is much larger than the net up move, thereby accounting for the down plot. Upside potential during such weeks may be small in terms of magnitude although downside moves can be large.
b. If Plot is Down and Percentage Reading is -60% or More Negative: This means that the market has moved Down 60% or more of the time for this approximate week during the years examined and that the size of the decline during down years is generally larger than the size of the rally during up years.
c. Plot is Up and Percentage Reading is -60% or More Negative: This is an indication that even though most years are down for this approximate week, during those years that were up, the moves were relatively large. If you sell short on this type of combination, then you may take a very large risk for a potentially small, but reliable profit.
d. Plot is Unchanged (Sideways) from previous week: It is an indication that the magnitude, or size of the move for this approximate week, is in equal balance between up and down. This does not necessarily mean a sideways trend for the week. Trend can only be determined by the accompanying percentage reading.
e. If Percentage is +60% or More, you can expect generally higher prices. If it is -60% or more negative, you can expect a down move. The sideways plot means only that the up and down moves are about equal in size.
5. Week Number is indicated under the percentage probability reading. The week number tells us how many weeks are left to contract expiration. These are full weeks. The last full week of trading would read "1" since it is the final full week in the life of the contract. A reading of 34, for example, means that this is approximately the 34th week before contract expiration. These figures are important in calculating the week number according to exchange expiration dates for any given year. Note that week numbers will allow you to determine relative time for any year. Remember that the month listings and number of weeks per month are approximate and that actual weeks will change somewhat each year. Note also that some contracts expire on the month before their listed month, i.e., March Sugar expires in February.
6. Month and Week are indicated by the listings shown. Please note that the number of weeks in any given month, using Friday as the last day of a week will vary from year to year. Sometimes November will have five Fridays, and other years it will have four. The weeks listed are only reference points. If you wish to adapt your chart for other trading years then simply determine when the given contract is due to expire and work backwards using the trading week as a guide. Once you have learned to we these charts you will find that it is not necessary to pinpoint the exact week. If a given market is conforming well to its seasonal trend you can superimpose actual weekly price onto the seasonal chart, and you can see whether there is a timing lead or lag. A clear acetate sheet can be used for this purpose.
7. Average Seasonal High is indicated by the highest plot on the chart. This means that during the years under study there has been a tendency for prices to hit their contract high around this week and/or month. If a high is made during the last few weeks of a contract then prices may move even higher several months thereafter, and the next contract month should be checked for this possibility. If a seasonal high is associated with high readings in the percentage column, and if a subsequent move to the downside occurs with equally reliable readings, then this is most likely a highly reliable seasonal top.
8. Average Seasonal Low is the same as high, except only in reverse.
9. Plot shows the seasonal tendency for all years, bull year and bear years. The solid line is the most important one. The percentage up/down readings (item #4) relate to the solid line (all years) plot.