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Seasonals Plug-in

Historical Averages

Video Transcript

In this Track 'n Trade Trading Training video, I want to talk to you about the Historical Averages. Now, the historical price averages are the average prices laid directly over the price chart. Which you can see here in red and green. Now, the seasonal trend itself, down here in the lower window. This is just a trend average based on a 0-100 scale. But the price averages or the historical price averages themselves are actually prices of the markets laid right over the top of the chart. So, these are your historical averages. Now, I like to look at, of course, a 1 year average. Which is just last years prices. Then, a 3 year average. You can see the 3 year is labeled here in the green. Then the 1 year, or last years price is, are represented here in red. So, you can see that this year, that the High Grade Copper, of course, followed the seasonal trend, looking for a trend low, here. Then, a high, here. Follow up through this time frame. Did nicely so, this year. But also, last year it did the same thing. Over the last 3 years, we've had that type of an average trend. So, that makes Copper a very good candidate to be looking for an opportunity to go long the market, right during the January time frame. So, let's go to the next chart.

This is the RBOB Gasoline. This is the June Contract. I want to talk to you a little bit about this one. This market has a tendency to be very seasonal in nature. In this respect, that down here in the trend average, you'll notice that we have an extreme low, down below the 20% gauge. It's rallies all the way up to an extreme high, on this during this time frame. So, we're looking for a rally, during that time frame, of course we did good this year. You'll notice that last year prices actually rallied during that same time. Also, over here in your 3 year average, prices rallied during that same time frame. So, we do see a little bit of a difference or divergence from the previous time frame. Which is back from September ending in January. Generally, we see a drop in price. But of course, this year, we did not see a drop. We saw a counter seasonal trend. Last year we saw the drop and 3 year averages saw the drop. But last year, or this year, it was not a drop it was a counter seasonal trend. But notice, that even though we had a counter seasonal trend during this time of the year, this time of the year, it picked right up, right where we're at and started right on the seasonal trend, once again. So, it made its adjustment, it did what it needed to do, and then it dropped right into the seasonal averages, again. It's very common, you'll see that quite often.

So, let's go to the next chart, this one is Oats. You can see that Oats, as well, has this an extreme high and an extreme low. Then, of course, around, here, up into an extreme high. Now, this year the market was kind of a difficult market. It went sideways, a lot. We anticipated a down trend, right here. We didn't get it. So, we got a counter seasonal trend, in here, where this one actually rallied, up through this time, when we anticipated a downtrend. But then it picked up, right in here and started the up-trend, again. Just as we anticipated ,right through this time-frame. We got the pullback here, just as we anticipated, on the longer term trend. Then, the rally once again at the end.

You'll notice on the historical averages, last year, we got very much the same type of a, of a trend, okay? So, we're getting a.. we're seeing a pattern here. Then, again over the 3 year average. Very much the same type of a trend.

So, let's go to the next one. This is Crude Oil. Now, Crude Oil of course, has been very strange lately. But you'll notice that we generally see a rally up through this time-frame. A peak right in October, a blow-off, and then another rally. Now, this year what did we get? We got kind of a small rally, not what we were anticipating. A rally right up to this point, here. But then, instead of a big blow-off, we counter seasonal trend. Notice that last year we actually got the roll off the top, the roll off the top, just like we were anticipating.

Then, we got the big blow off last year on the historical averages, then the rally. Again, on the 3 year averages, we kind of got the same thing that's reflected down here in the lower window. But this year, this market went totally counter seasonal, didn't it? So, we can see what we can anticipate, but yet, we always have to be aware that the market does not always follow these seasonal trends absolutely perfectly, as we.. we would like them to. Of course, this is just the best we can do, by saying, let's look back in history to see what it's done, on average, over a longer period of time. Then, markets have a tendency to follow those averages. But they don't always do so.

So, let's go to the next one. Because we have some kind of fundamental or technical reason, generally a strong fundamental reason, that causes the market to stop following the seasonals. So, what happens is once that fundamental reasoning, why the market stops following the seasonal nature of the market is over. Then, it generally kicks back into the general seasonal trend, again.

Now, this is... this is Orange Juice. You can see that the Orange Juice Contract, we generally see a nice bump in here. So, this is a big rally, dropping down into the end of May, where we generally see the low point. So, you'll see that this year, of course the contract did just as anticipated.

Notice, last year... last year prices were way up here. We didn't get the blow off until clear back in here. But we still have the blow off, came in a little bit late.

Last year, the 3 year average, you know, got the blow off too. It didn't quite go as strongly. So, you can see, you can use, again, use the historical averages, to compare against the long term seasonal trend average, against the current market price.

So, let's go to the next one. This is Silver, again Silver the metals, being a... a very strongly seasonal trending commodity. What we're seeing, here is we generally see a low in the market, and then rally up through into February for the High. Of course, we saw that, once again this year. We saw a big rally.

Now, if we look at last years prices- we got kind of this little funny trend, if you remember last year. Then the 3 year average, of course is a gentle increase in price, over here. Notice though, that it's very common, seasonally speaking for the market (after March) to just kind of go sideways, and get kind of stagnant. Of course, we see that on the 3 year average, and we see that last years prices, and we see it, once again here. So, this is a good indication, not only helping to know when to look for opportunities to get into the market, but also when to stay out of the market.

Okay, here's Soybean Meal. Soybean is another one that's very seasonal. It's planted at the same time every year, it's harvested at the same time every year, taken to market at the same time every year. So, what we're looking at here, we have a situation where we look for a low. A strong rally point, to the high. Of course, this is what we have, a strong rally point to the high. Of course, we get another one here, a strong rally point right into expiration.

Now, if we look at the historical averages, we see that the last years prices kind of dipped and followed along with the overall seasonal trend. Then, we see that the 3 year average did the same thing. 3 year average is kind of down like this. Notice that the 3 year average is not quite as strong through this last uptrend. Although, I think this year we're picking up and getting a nice trend for it. Next year we'll see that reflected in the 3 year average.

So, you can see that the prices are quite high, compared to where they've been over the last year, and the last couple years. So, prices of Soybeans are very high, on average, compared to previous years. But the trends themselves, nonetheless, the trends themselves still seem to follow the seasonal trend. Even though, the price is actually higher this year than it was in previous years.

Now, here's the U.S. T-Note. This is again, one of my favorite markets. This market here, very seasonal. We look for the low. here. We see the big rally point, all the way up into October. We see the low here, the big rally point all the way up into October.

Then, of course the 3 year average generally rallies again, up through this time frame. Even last year, you see very strong time frames where it rallied up through this time frame. Now, on the 3 year average, we generally see the market go kind of sideways. Even last year, the market kind of went a little bit stagnant. Very common to see that happening on the seasonals trend, as well.

This year, though we have a nice rally up through this time frame. So, even though we generally get a sideways channel during this time frame. This year, something a little bit different. It has a nice rally in there.

That's the comparison of the historical seasonal averages, working in combination with the overall seasonal trend average.


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