Frequently Asked Questions

Seasonality acts like a technical signal generator with a fundamental background. It blends price and calendar elements. In a statistical sense, the calendar aspect adds value because it’s an external factor, independent of standard indicators. The same is true of intermarket analysis and fundamental analysis. This is seasonality’s main advantage: it doesn’t correlate with other indicators.

External signal generators do not have a virtual automatic loss-limiting function with individual signals, as is the case with trend following methods, which means for example that stop loss orders should be used. The disadvantages of seasonality include the fact that individual years can vary, that seasonality itself can change and that random events (e.g. extreme years) can look like seasonal patterns. It must be kept in mind that seasonality as such does not exist in one market; rather only individual seasonal patterns exist.

A seasonal pattern is an identified trading opportunity with above-average profit that recurs almost every calendar year.

There are several possible reasons for the emergence of seasonal patterns. These include weather-based patterns such as harvest periods or the heating season, the timing of interest payments (e.g. at year-end or semi-annual payments), investor sentiment during certain times of the year (e.g. in the autumn), annual or quarterly financial reporting periods for companies (which can also be associated with temporary repatriation of capital) or investment funds, tax payment deadlines, periods of regular fund inflows, inventory cycles and more.

Seasonal patterns that are based on sound statistics and a clear cause are considered stable and have a high chance of repeating in the future.

Why do stock indices rise at the turn of the year, while falling in August and September? Isn’t that just coincidence? Questions like this come up whenever seasonality is studied for the first time. Because only if the stock market’s past movements were seasonally based and not coincidental can seasonality be considered a useful forecasting tool.

In fact, there are reasons behind seasonal trends. Stock funds try to improve year-end results by pushing stock prices higher. Other reasons include interest payments in December, because year-end bond coupon payments flow partly into the stock market. The holiday effect (Christmas, year-end) also plays a role. Moods are generally positive and many investors use the time off to make investment decisions. These factors influence prices and lead to seasonal patterns that investors can use.

Each part of the year has a unique reason for its seasonal tendency, for example the rally in autumn or the market strength at the start of the year. Every market also has its own reasons for seasonal behavior. For instance, changes in interest rate policy play little role in agricultural markets whereas harvest time does. But just as we can’t always identify the reasons for a price move, we also can’t always know the actual reasons behind seasonal patterns. The most common reasons linked to seasonal trends include:

• Payments in specific seasons (i.e., at the end of the year)
• Sentiment at certain times of the year (holidays, Christmas, sporting events)
• Differences in financial reporting (i.e., investment funds’ financial statements)
• Harvest periods
• Heating season

Seasonal charts show the average course of past years. If there is an extreme move during the year, such as the crash of 1987, it clearly influences the seasonal chart more than a “normal” year would. Also, similar moves can occur during the same part of the year for a few years in a row with no true seasonal basis. For example, company news released by chance at the same time of year over several years. This can lead to patterns appearing in a seasonal chart that have no seasonal nature.

Seasonality, like any statistical method of analyzing the financial markets, is only based on historical data. A seasonal pattern such as the fall rally is identified by analyzing a large number of years. But not every year is the same. In some years the rally is strong, in others weaker, and in some years the market falls. Only after analyzing several years does a seasonal pattern emerge.

But because other factors influence price moves, such as fundamental, psychological and political factors, individual years can play out differently and sometimes run completely against the seasonal trend. Even with a pattern as statistically solid as the fall rally, there will always be years that are exceptions.

Because of its calendar-based nature, seasonality is an intermediate-term signal generator. It can also be used for short-term trading because the primary trend influences the profitability of short-term signals. Long-term investors can also use seasonality to fine-tune entry points, for example by shifting a planned stock purchase from August to the more favorable November time frame.

Seasonax is a tool that helps traders identify and evaluate the seasonal patterns of any instrument to boost returns. The app is available on any device and is based on Dimitri Speck’s unique seasonality algorithms.

It gives investors solid statistical support for their investment and trading decisions.

Seasonax offers 2 ways to identify seasonal patterns.

• Open the instrument of your choice and use the results of our pattern finder.
• Use the Seasonality Screener. The screener identifies seasonal patterns across whole markets such as the S&P 500 or commodities.

By using our detrending function, we apply statistical methods to separate trend from time. This means the overarching uptrend is removed, which is especially useful for “high flyer” stocks that show a constant uptrend in recent years. You’ll immediately see which time periods contain the relatively weak phases. This makes it easier to analyze and identify cyclical patterns.

Seasonal price trends are shown by averaging the price movements of previous years. The mathematical operations performed by our unique algorithm deliver precise results.

Our web app doesn’t offer intraday data. However, as a Bloomberg Professional or Refinitiv EIKON user, you have access to intraday data through our Seasonax integration in their ecosystems.

Bloomberg Professional Terminal: Type “APP SEASONS GO” — Thomson Reuters / Refinitiv EIKON: Look for “Seasonax” in the app library.

Both integrations offer a free trial, so start yours risk-free today.

I’m specifically interested in short trading, but I can’t find any analysis for short positions.

As of now, all calculations are based on long trades. However, you can still use Seasonax to identify opportunities for short trades. Learn here how to trade both market directions with the help of seasonality.

We use end-of-day adjusted close prices. This means stock splits and dividend adjustments are factored in.

Most seasonality apps have very limited tools. Their output is often imprecise or even inaccurate. Seasonax is based on algorithms that generate precise seasonal charts and accurate return calculations. These algorithms solved a number of important problems associated with seasonality for the first time.

Seasonax tools help users identify trading opportunities and save time they’d otherwise spend on other forms of research.

Every new Seasonax user gets a 30-day free trial. During this time, you have full access to all features and data with no restrictions. No credit card is needed to register.

At the end of the 30-day trial, if you want to continue using our app, you’ll be prompted to choose one of our paid plans and enter your payment details. If you choose not to subscribe, your access will end and no further action is needed.

Try our platform free for a full month and optimize your investment strategy.

The professional subscription offers far more markets to screen with the Seasonality Screener. It also includes a comparison feature to compare the seasonal trend of an instrument with a specific year or with another instrument (e.g. its benchmark). Professional subscribers can also upload their own custom data to analyze. Learn more about Seasonax features.

You can switch at any time and the change takes effect immediately. Please note that there is no trial period if you already have a subscription. Unused time from your former subscription will be credited to your next invoice and reduce the amount owed.

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No. The Seasonality Screener is included in your Seasonax Professional subscription. However, for Seasonax Basic users, the number of screeable markets is limited.