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Seasonality Charts

On his recent StockCharts TV show, Grayson Rose talked about Seasonality Charts. It was a very good presentation but one thing he said about them isn't accurate and a common misconception.

At the bottom of the Seasonality Chart there is a slider with a number in it. It defaults to 5 but you can drag the edge of the slider to increase or decrease the number showing. The number showing is Calendar periods in years. You can also move the slider to look at different periods.

Looking at a seasonality chart today, with a default of 5, you may think you are looking at 5 years of data. You are really looking at 4 full years of data plus the current YTD for the chart.

So your January seasonality will include 5 years of data, but your March and onward is only reflecting 4 complete years. If you want to see 5 complete years, you need to show 6 on the Seasonality slider.

Otherwise, it was a very good presentation on, what I consider, a valuable resource on StockCharts.com

Comments

  • In a recent blog posting, one of StockCharts authors talks about the Seasonality chart for XLV but he fell into the same misconception of what the chart settings mean.

    He shows the XLV seasonality chart and says that it is a 10 year period. There is a 10 in the slider bar at the bottom of the chart. If you look at the YEARS showing in the top of the chart, you'll see 2024 is one of the 10 years showing.

    So this chart is actually 9 years of seasonality plus a portion of 1 month in 2024. That's not 10 years.

    To really see 10 years you would need to move the slider bar to the left to make 2024 disappear and 2014 appear.

    It's a common mistake that can significantly alter the analysis



    Moving the slider over




    I'd also like to mention that there are alternate views of the seasonality. On the left of the slider bar there are two other buttons to click on to see the seasonality in line chart formats. The 1st button is a "Separate" display which will display the yearly line charts, most recent on top down to oldest. If you show the current year, that is displayed on top in Red.



    If you click on the Middle button, it will display all of the years in a performance type view. The coloring remains the same with the current year in Red. Look at how that Red and the Orange year (2017) line up.



    Seasonality charts can be extremely helpful to look at. I prefer the middle button to look at how things look, particularly after good or bad years as well as seeing how the current year looks, in shape, compared to other years. XLV off to a strong start. What other years are like it? How does a strong start translate to the year.
    That sort of thing.

    https://stockcharts.com/articles/dont_ignore_this_chart/2024/01/xlvs-record-rally-the-mustknow-352.html
  • lmkwinlmkwin ✭✭
    edited January 14
    And just an FYI, those Year boxes showing at the top of the chart are actually buttons. If you click on them it will gray out that year and remove it from showing in the display and the seasonality calculations. To see that year again, click on it and it is no longer grayed out.

    I use this to see what a bullish period seasonality looks like vs a bearish period for example.

    Another FYI, the slider only extends out (click and drag the left side of the slider) to 20. If the stock has more than 20 years of data, you will need to move the slider to the left, by clicking on the left arrow of the slider bar or clicking on the slider bar and dragging it left, to see older periods.
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