Stay 1 Step Ahead With Seasonality by Investing in Transportation
- It’s easy to feel overwhelmed with all the swings in the stock market.
- But there’s a pattern that Chad Shoop uses to stay one step ahead of the whipsaws.
- Click here to learn more about this market-crushing strategy before the next major move.
The stock market’s recent whipsaws can leave you feeling as if you are one step behind.
You may also feel that these moves are unpredictable — and you aren’t sure of what to expect next.
But one stock market phenomenon stays a step ahead: seasonal patterns.
Seasonal patterns nailed the stock market’s rally earlier this year. These trends also timed the pullback we saw at the end of July after the president announced we were not as far along in trade talks as the markets had hoped.
And now, the patterns are shifting again.
This gives us a head start on a profitable pattern that begins this week. Now’s the time to jump in.
Read on to learn more about how you can take advantage of the next major move in the stock market.
Seasonality Trends: Stay 1 Step Ahead of the Stock Market
Watch my video below to learn more about seasonal trends.
Seasonal patterns are one of my go-to strategies to predict the swings in the stock market.
Seasonality looks at how a stock, or sector, performed over a specific time frame. We can take the seasonal trends for those sectors and find ideal entry and exit points.
Identifying these trends and taking action helps us stay one step ahead of the stock market. We know the next direction it will take.
Look at the recent stock market pullback, for example.
The drop in the market was right in line with the three seasonal trends that I tracked through the month of August.
- A bearish trend in materials stocks.
- A bearish trend in financial stocks.
- A bullish gold trend.
Just before we headed into the stock market decline, my system alerted me to jump in those three areas.
You can see what I mean in the chart below.
We did, and the results were phenomenal!
Our three positions saw quick double-digit gains as the stock market whipsawed sharply.
The materials sector plunged 6%. Financial stocks fell over 8%. And gold prices continued to break out — climbing another 7% since we jumped into those trades.
We got in just ahead of these swift moves. It was all thanks to the seasonal trends for those sectors.
Right now, another seasonal trend is taking place. And we want to capitalize on this trend in the transportation sector.
Transportation: The Next Seasonal Trend to Capitalize On
The transportation sector covers stocks focused on transporting goods and people across the country.
I’m talking about stocks such as FedEx Corp., JetBlue Airways Corp. and CSX Corp.
As you look at the chart for the transportation sector below, you’ll notice the strong rally in the second half of the year. That’s what we want to profit from.
The blue-shaded area highlights the seasonal trends the sector sees over the year.
But the only trend worth following is the rally that takes place from August through the end of the year.
That’s the area we’ll make big money from in the months ahead.
Jump on Transportation’s Rally With Call Options
One way to benefit from this seasonal trend is to buy call options on an exchange-traded fund (ETF) covering the sector.
The best ETF covering the transportation sector is the iShares Transportation Average ETF (NYSE: IYT).
This fund gives you the clearest exposure to the seasonal trend. It is designed to track the Dow Jones Transportation Average.
I’d use the March 20, 2020, call options to benefit.
Simply buy the option with the strike price closest to where the ETF is trading.
At last glance, the ETF was sitting around $175 a share. Buying the March 20, 2020, IYT $175 call option costs around $12.50 a share, or $1,250 a contract.
Click here to learn more about how to profit using seasonal trends and how to time the market.
Chad Shoop, CMT
Editor, Automatic Profits Alert
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