Here are different seasonal strategies for trading the Value Line Index compared with the New York Stock Exchange Composite Index and the Standard and Poor's 500.
Most stock market
traders are familiar
with the January
is the tendency for
smaller issues to
chips at the turn of
the year. But January
is certainly not
the only time the
stock market exhibits
seasonal tendencies with the potential
to be exploited in trading strategies.
In fact, with the January effect
apparently fading in recent years as it
becomes better known, this may be a
particularly good time to explore other
seasonal trading opportunities.
One of the simplest ways to exploit
seasonal market tendencies is through
trades in stock index futures contracts.
Using futures, a trader can in a single
transaction buy or sell an index representing
a large basket of stocks.
With the introduction in recent years
of a number of new futures contracts
on different indices and in different
sizes, the trading possibilities are
greater than before. To research strategies,
however, only three product lines
have a history extensive enough to
draw upon for long-term analysis — contracts based on the Standard & Poor’s 500 index, the New
York Stock Exchange (NYSE) Composite Index, and the
Value Line. These three indices are each unique in market
representation and thus present unique seasonal spread trad-ing