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MRCI's Scenario Study

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MRCI's ScenarioSM Study
ScenarioSM Study for Dow Jones Utilities as of Oct 29, 2021
Condition 1: Higher Monthly Close.
Action ---> Buy that month's close with objective of exceeding month's high within 2 months.
Tested Month Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Tested Years   45 45 45 45 45 45 45 45 45 45 45
Closed Higher   25 18 26 30 28 26 28 26 26 30 24
Exceeded High   18 17 26 24 22 23 26 20 23 25 17
Scenario Percentage   72% 94% 100% 80% 79% 88% 93% 77% 88% 83% 71%
Avg Max Increase   4.80% 5.48% 5.08% 5.59% 5.60% 4.75% 4.61% 6.03% 5.60% 5.20% 4.33%
Max Increase   9.67% 11.96% 19.81% 14.30% 11.22% 9.82% 23.61% 13.93% 14.31% 12.12% 7.74%
Avg Days To Max Increase   17 18 15 18 19 17 16 20 14 18 20
Avg Max Decline   -1.27% -2.30% -1.25% -1.99% -1.43% -1.41% -1.13% -1.82% -1.25% -1.60% -1.18%
Max Decline   -3.05% -11.63% -5.66% -7.28% -3.93% -4.42% -3.65% -6.64% -7.26% -6.05% -3.44%
Avg Days to Max Decline   8 11 8 10 7 7 6 12 8 7 4
2021 Contract Condition       Yes Yes     Yes Yes   Yes  
Action       Yes No     Yes Yes   Not Yet  
Copyright © 1989- Moore Research Center, Inc. All Rights Reserved.
Condition 2: Lower Monthly Close.
Action ---> Sell that month's close with objective of penetrating month's low within 2 months.
Tested Month Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Tested Years   45 45 45 45 45 45 45 45 45 45 45
Closed Lower   19 27 18 15 17 19 17 18 19 15 21
Penetrated Low   12 16 9 10 8 11 13 13 11 7 8
Scenario Percentage   63% 59% 50% 67% 47% 58% 76% 72% 58% 47% 38%
Avg Max Decline   7.97% 8.65% 5.11% 3.83% 10.31% 8.54% 6.69% 7.19% 12.17% 4.36% 3.01%
Max Decline   21.92% 29.34% 10.39% 6.70% 35.33% 31.91% 17.96% 38.37% 31.31% 8.28% 4.70%
Avg Days To Max Decline   16 16 17 14 21 15 17 14 18 12 11
Avg Max Increase   -1.24% -1.65% -1.59% -1.47% -1.54% -1.78% -2.41% -1.60% -2.10% -1.01% -1.02%
Max Increase   -4.80% -10.26% -3.69% -4.09% -5.76% -4.65% -6.43% -4.76% -6.99% -2.36% -1.89%
Avg Days to Max Increase   3 9 8 4 8 11 11 11 8 2 3
2021 Contract Condition   Yes Yes     Yes Yes     Yes    
Action   Yes Yes     Yes No     Not Yet    
High 879.20 873.45 876.00 886.10 937.40 928.60 923.10 923.60 952.15 952.75 928.90  
Low 836.35 829.60 795.35 792.10 873.95 887.10 872.75 873.55 908.10 867.90 871.75  
Close/Last 864.65 852.40 795.60 880.35 919.25 897.35 876.05 907.40 934.30 874.65 915.90  

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Newsflash

Think again! Fed cuts and MRCI seasonal trends could unlock profits in Treasuries. Challenge yourself to explore the TLT ETF and futures. https://www.barchart.com/story/news/33123477/lower-interest-rates-in-the-3rd-quarter-opportunities-for-traders-and-consumers

Historical research from Moore Research Center, Inc. (MRCI) highlights a seasonal tendency for Treasury prices to rise and yields to fall in July. This pattern holds across the 5-year, 15-year, and 30-year seasonal patterns, implying that the fundamentals during this period have been relatively consistent, driven by market dynamics and investor behavior. July often sees reduced trading volumes due to summer slowdowns, which can amplify price movements in bonds. Investors may rebalance their portfolios in the third quarter, as the end of September marks the Federal government's year-end, which is expected to increase demand for Treasuries.

This seasonal trend offers traders a potential edge. For instance, MRCI data shows the 10-year Treasury note often rallies in July, with prices rising as yields dip. This could be a short-term opportunity for those positioned in Treasury futures or ETFs. However, seasonality is not a guarantee; traders must combine it with other analyses, such as technical indicators or macroeconomic trends, to make informed decisions.