How do quarters affect equitiy pricing?

[Lojanica]

How do quarters affect equitiy pricing?

I would like to start discussion for learning purposes as to how the business quarters can affect equity and commodity pricing. I will add as much as possible however will defer to any and all that know more.

I study cycles and thus the interest.

 

[Lojanica]

I've been looking at this end of quarter business and cycle wise I think many on this board are up to something. End of the quarter signals "a window" of probable change in trend. When I boot up a weekly chart and look at the end of March, June, Sept. and of course Dec 31st these have all been possible major turning points. I'll post some weekly charts with stochastics to make my point.

I'm not good with chart sharing so forgive my ineptitude.

 

[OTCkrak]

Quote from Lojanica:

How do quarters affect equitiy pricing?

it doesnt. im 100% sure there is no profitable trading system based only on calender days/ moon cycles.

you might be seeing volatility related to 10Q reports or a seasonal affect with some commodities and small cap stocks but that goes both ways and is hard to determine causality.

 

[Lojanica]

Quote from OTCkrak:

it doesnt. im 100% sure there is no profitable trading system based only on calender days/ moon cycles.

you might be seeing volatility related to 10Q reports or a seasonal affect with some commodities and small cap stocks but that goes both ways and is hard to determine causality.

I am studying the SP500 weekly and what I'm finding is that at the end of quarters what appear to be important zones for trend changes. I agree that you can't say on this date but it makes sense in that businesses and even the govt will often make decisions which could have market implications on or around the end of the quarter.

 

[nazzdack]

Quote from Lojanica:
----How do quarters affect equitiy pricing?
----commodity pricing.

1) Window dressing? End of the month, end of the quarter, end of the half and end of the year buying?
2) The CRB / "Goldman Roll" in commodities? Look for the "volume pop" on the daily chart. :eek:

 

[Lojanica]

Quote from nazzdack:

1) Window dressing? End of the month, end of the quarter, end of the half and end of the year buying?
2) The CRB / "Goldman Roll" in commodities? Look for the "volume pop" on the daily chart. :eek:

OK!!!

So now we have this swirl induced by rollovers, business quarter reporting, taxes, and monthly/quarterly, yearly cashflows.

Can one obtain directional clues about price by looking at options/futures volume rolling? Assume call options or futures roll less is there any meat in analyzing this activity for market directional clues?

 

[Lojanica]

Now clearly news trumps everything which is why perhaps eod, eom, eoq, eoy gets lost in the "noise" of the market gyrations.

http://www.nydailynews.com/news/pol...obama_says_buy_stocks_now_good_deals_the.html

Here was the gift from the FED.

http://stockcharts.com/h-sc/ui?s=$SPX&p=W&b=5&g=0&id=p86114109254

666 in the S & P within hours after this pronouncement.

I heard MBS were being bought until March 31st, 2010. I know that corresponds to a turnaround time and we are coincidentally also being bombarded with buy, buy, buy PR as we transition to a unsupported or severely less supported market. Sounds like PR from an administration tapped out and hoping the wolves don't descend. We may not even make it until post-tax filing mid-April although my target for a significant correction is still Mid-April, 2010.

 

[Lojanica]

From CXOAG Investing Notes---thank you---

End-of-Quarter Effect ...evidence suggests some systematic strength the first few days after ends of quarters bracketed by weakness or doldrums before and after, with effects small compared to daily return variability. The fourth quarter pattern is the strongest and most distinctive.

Turn-of-the-Month Effect Persistence and Robustness ...the turn-of-the-month effect exhibits some robustness across time and for different indexes, but it may weaken or disappear in summer months.

An Annual Worldwide Optimism Cycle (Sell in May)? ...evidence from multiple tests supports belief in an annual optimism cycle as a principal cause of the worldwide outperformance of stocks during November-April compared to May-October.

Trading Around Option Expiration Days ...evidence from simple tests offers some support for belief in a modest positive bias for the broad stock market a few days before and a negative bias just after equity option expiration dates.