Seasonal Sector Trades by Hirsch Jeffrey A.;Person John L.;Person John L;Hirsch Jeffrey A;

Author:Hirsch, Jeffrey A.;Person, John L.;Person, John L;Hirsch, Jeffrey A; [Jeffrey A. Hirsch]
Language: eng
Format: epub
ISBN: 9781118792711
Publisher: John Wiley & Sons, Incorporated
Published: 2000-01-01T00:00:00+00:00

To access an online version of this table, please visit www.wiley.com/go/seasonalsectortrades.

March Short Euro (June) Trading Day: 11, Hold: 9 Days

Euro FX (Comb) CONT LIQ @ CME (Weekly Bars)

Chart courtesy of www.tradenavigator.com ©1999–2013.

Euro FX (Comb) CONT LIQ @ CME (Weekly Bars)

Chart courtesy of www.tradenavigator.com ©1999–2013.

British Pound Invasion

The British pound has a distinct pattern of doing the opposite of the euro and Swiss Franc. It has a strong tendency to move up against the U.S. dollar from mid-March through the latter part of April. In fact, in the 38-year history, it has been positive 28 times for a success rate of 73.7%.

Entering on or about March 21, holding a long position for 22 trading days and exiting on or about April 23 has had a string of winners the last nine years in a row, starting in 2005. Perhaps the fact that Britain’s fiscal year begins in April helps to push the pound’s value up against the U.S. dollar, as money moves back overseas. Cross-transactions between the pound versus the euro currency and the pound versus the yen may help influence the rise in the pound’s value relative to the U.S. dollar.

The weekly chart that follows depicts the British pound with the exchange-traded fund (ETF) CurrencyShares British pound (FXB) overlaid to illustrate how the two instruments trade in tandem. Traders have the ability to trade foreign currencies on a regulated marketplace such as the CME Group’s futures and options exchanges, which provide more electronic access than ETFs afford. Investors who require less leverage will find the FXB an adequate trading vehicle. Either way, the seasonal tendency is quite strong for the pound to move up in this timeframe.

Using John’s proprietary algorithm, the accompanying chart delineates the price projections for the British pound at the time of this writing through Q1 2014 based upon recent trading activity and historical seasonal expectations. Three different scenarios are displayed so that you can better gauge the quality of this seasonality’s trade setup and decide if and how to execute with respect to technical, fundamental, and market sentiment readings at the time.

Bullish: Resistance = 180.30 | Support = 156.90

Neutral: Resistance = 171.15 | Support = 152.50

Bearish: Resistance = 166.00 | Support = 143.40

Entry Exit Profit/

Loss

Year Date Close Date Close

1976 3/19 188.90 4/21 182.60 –$3,938

1977 3/21 169.00 4/21 171.10 1,313

1978 3/21 190.00 4/21 181.65 –5,219

1979 3/21 203.40 4/23 206.65 2,031

1980 3/21 219.00 4/23 227.10 5,063

1981 3/20 226.65 4/22 219.65 –4,375

1982 3/19 181.10 4/21 178.35 –1,719

1983 3/21 147.00 4/21 154.40 4,625

1984 3/21 143.70 4/23 142.05 –1,031

1985 3/21 117.45 4/23 123.70 3,906

1986 3/21 150.60 4/23 152.40 1,125

1987 3/20 159.25 4/22 162.20 1,844

1988 3/21 182.20 4/21 189.25 4,406

1989 3/21 171.58 4/21 170.48 –688

1990 3/21 156.88 4/23 161.92 3,150

1991 3/21 177.64 4/23 169.88 –4,850

1992 3/20 168.66 4/22 174.56 3,688

1993 3/19 148.34 4/21 153.42 3,175

1994 3/21 148.44 4/20 149.02 363

1995 3/21 158.56 4/21 160.96 1,500

1996 3/21 153.56 4/22 151.10 –1,538

1997 3/21 160.24 4/23 162.14 1,187

1998 3/20 166.20 4/22 166.78 363

1999 3/19 162.70 4/21 160.58 –1,325

2000 3/21 157.38 4/20 157.94 350

2001 3/21 142.88 4/23 143.

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