Posts Tagged ‘Seasonality’
Seasonality De-Constructed
An excerpt from the Feb 10, 2024 issue of the Astrology Letter…
Search around the internet and you will find people promoting the concept of seasonality. The above chart of Wheat price is a typical example.
Look towards left side of this seasonality chart.
The suggestion is that Wheat prices will decline sharply every year in the month of March after having made a peak in late February/early March. Surely this must mean that here and now I should be planning to take a short position on Chicago Wheat futures once the month of March arrives?
Well….not exactly….
These seasonality charts are based on many years of price data. The above chart is based on 20 years of price data. Over the scope of 20 years, if several years posted strong declines during the month of March, those points would mathematically more than compensate for multiple years of modest or no significant price declines. Hence, the person viewing a seasonality chart at face value can be led astray.
As a trader or investor, how do you use these seasonality charts and at the same time stay out of trouble? The answer is to use some basic astrology.
The starting point for the application of basic astrology is to look at the first trade horoscope. In the case of Wheat, we need to study the natal horoscope for Wheat futures which started trading on January 2, 1877. (Note – Corn and Oats share this same first trade date).
The above horoscope wheel from Jan 2, 1877 shows the position of the planets. What is curiously interesting is how the Mid Heaven, Mercury, Pluto and Moon form a 4-sided parallellogram shape. I am convinced that traders such as W.D. Gann watched for bodies like the Sun, Moon, and Mars to transit past the corner points in this 4-sided geometric shape.
In 2023, the price of Wheat peaked on February 13. To the student of seasonality, this would have been unexpected because the seasonality chart calls for a peak at the end of February. So, why did Wheat peak in mid-February? At February 13, Moon was passing the natal Mid-Heaven point (and the natal Mars point). Mercury was passing the natal Mercury point in the 1877 horoscope. Two corner points in the geometric pattern in the 1877 chart! No wonder price peaked as human emotion changed.
More recently, in 2024, the price of Wheat had been trending down. In mid-January, a countertrend started but failed around Jan 24-26. Taking this to be the seasonal top, means the student of seasonality was once again tripped up because price peaked before it should have. Why did price peak in late January? Sun had just passed the natal Mercury location. Mars was passing the 1877 natal Ascendant point and Saturn was at the natal Saturn point.
The next time you see a Seasonal chart, do not just blindly accept the price turning points illustrated on the chart. The chart itself will be based on 20-30 years of data which gives a somewhat mis-leading view of things.
Instead, look at underlying planetary transit events that align to the natal first trade horoscope. These events will cause the seasonal price trend turning points to shift slightly from year to year. The strength of any planetary aspects will also play a role in the voracity of what price does at a trend turning point.
