TSXV:ODX.H - Post by User
Post by
ablekaakon Jan 31, 2010 12:28pm
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Post# 16737150
interesting post
interesting postI came across this post on another bullboard... But it is an interesting read and might be worth a look..
"From January 29th to May 5th, during the years 1990 to 2009, the metalsand mining sector (U.S. S&P GIC sector) has produced an averagegain of 6.3% and has been positive 65% of the time. This compares tothe S&P 500 which has had an average gain of 3.7% and has beenpositive 80% of the time. Although the S&P 500 has been has beenpositive more frequently, the metals and mining sector has producedbigger gains. During this time period the metals and mining sector hashad a gain greater than 10% seven times, compared to three times forthe S&P 500
The metals and mining sector tends to do wellat the beginning of the year as firms tend to place more orders forbase metals to meet any increases in their annual forecast, winterimproves access to many mines in the northern hemisphere and investorsanticipate good news from the annual general meetings that are oftenheld in the spring time. Investors should remember that the metals andmining sector tends to underperform in the summer months as much ofEuropean manufacturing shuts down, decreasing the demand for metals.Historically, the best time to be reducing positions in the metals andmining sector has been the beginning of May.
The seasonalcycle of the metals and mining sector is evident in the average yeargraph from 1990 to 2009. This graph averages nineteen years togetherand shows the yearly trend. The sector on average performs well fromthe end of January until the beginning of May, volatility increases andthen the sector slides until October or November and then once againtypically performs well until the end of the year.
Itis important to note that this is an average trend and not all of theyears are similar -- some years the seasonal trade works and some yearsit does not, but on average it has produced above average returns.Also, some years it is better to enter the second half of the seasonaltrade before January 29th and some years later, and exit either beforeor after May 5th. Although using the average dates has producedsuperior returns, using technical analysis can help in choosing theentry and exit dates. "
Excerpts from : Latest Exclusive Insights by Columnist - Brooke Thackray
as was posted at TD Waterhouse, Dated : Jan 28th, 2010