Every year again – columns


of Stephan Feuerstein, Editor-in-Chief for Leverage Certificates Trader

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We have already drawn attention to the seasonal course of the stock markets at one point or another. A mostly strong December is followed by a mixed January and February. The DAX does not usually pull itself up again until mid-March and then storm the summit in April. In May this collapses again, followed by a mediocre June. In July, the index is once again firmer, before the months of August and September shine with a high degree of constancy with negative signs. From October the picture brightens again, which is usually followed by a firm November and an even firmer December. So much for the usual cycle in the DAX.

Do not ignore various exceptions!

Of course, this seasonal curve can be broken down in more detail using various pre-filters. For example, pre-election years tend to be better than post-election years. After all, gifts are often given out in pre-election years, whereas in post-election years the unpleasant decisions are more likely to be made (after all, you shouldn’t remember them so well until the next election). But there are also other filter options to tease out a little more added value from the quite interesting seasonality.

From January to the whole year?

At the turn of the year, the “January indicator” is often mentioned. Accordingly, the development of the first week of January should provide a conclusion on the final result for January. And from this knowledge, conclusions can be drawn about the year as a whole. Which sounds quite adventurous, but can also be proven with data. After all, the result of the first week of January (positive or negative) agrees with a very high hit rate with the end of the whole month. Of course, this rule cannot be applied 100 percent successfully either. However, if the past has a high hit rate and the movement can be reasonably justified, this evaluation could continue to be successful in the future. This year, therefore, the signs for another stock market rally and for a positive stock market year do not seem so bad.

We wish you a successful stock market week

Stephan Feuerstein
Leverage Certificate Traders

Stephan Feuerstein is editor-in-chief of the leverage certificate trader and publisher of the stock exchange service TradingGruppe 2.0 ( Trading with derivatives is in the foreground in both letters, with all trades being announced the day before and being traded in real money with the leverage certificate trader in a real money model portfolio.

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