How to use Return Calendars
Every market goes through a pattern of strength and weakness during a year, caused by various factors such as seasonality or economic cycles. Therefore, investors and traders must stay updated with these fluctuations to make sound trading decisions.
While traditional seasonal charts offer a long-term perspective of market trends, they may not give traders a precise and detailed analysis of daily returns. To bridge this gap, Return Calendars have become vital tools that provide traders with a short-term perspective of market trends.
Return Calendars analyze daily returns of specific timeframes, such as 1/2/4/6-day periods, providing traders with a comprehensive understanding of market behavior in different scenarios. By studying returns in detail, traders can identify unique trends specific to certain times of the year and capitalize on profitable opportunities.
Moreover, Return Calendars help traders mitigate market risks by identifying red flags and adjusting their trading strategies accordingly. This enables traders to implement timely adjustments and prepare for potentially unfavorable market situations.
Return Calendars focus on specific times of the year, indicating trends of above-average returns, volatility, or other significant factors that investors may track. For instance, the day before Christmas often shows higher than normal market returns. Similarly, the bias two trading days before the 4th of July Holiday is another period of interest where market trends may indicate higher-than-average returns.
Investors and analysts may track cumulative returns based on the first four days of the new year to take advantage of year-end tax-loss selling. Finally, the six-day performance return leading up to the end of the second quarter is another period that analysts examine closely to gain insight into the stock market’s behavior during the critical end-of-the-quarter period.
In conclusion, Return Calendars help traders stay informed and responsive to market changes, enabling them to make profitable trades while managing potential risks.
To see Return Calendar updates for 30+ futures markets, use the following menu guide Charts/Seasonal Overview/Return Calendar, or click here.
