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MRCI's Scenario Study

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MRCI's ScenarioSM Study
ScenarioSM Study for Value Line Index 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   37 38 38 38 38 38 38 38 38 38 38
Closed Higher   22 25 26 24 26 20 21 21 19 24 28
Exceeded High   20 23 24 21 22 17 20 16 16 20 25
Scenario Percentage   91% 92% 92% 88% 85% 85% 95% 76% 84% 83% 89%
Avg Max Increase   5.96% 5.66% 6.94% 6.99% 5.76% 6.56% 4.80% 3.80% 6.05% 8.04% 3.45%
Max Increase   15.27% 17.47% 33.15% 21.94% 14.55% 20.76% 15.65% 11.06% 15.29% 26.21% 8.69%
Avg Days To Max Increase   18 19 19 14 18 19 16 15 20 23 19
Avg Max Decline   -0.66% -1.42% -1.88% -1.80% -1.42% -1.43% -2.40% -1.97% -2.86% -1.11% -1.04%
Max Decline   -3.17% -5.34% -7.87% -10.85% -6.07% -7.11% -8.30% -7.81% -10.96% -5.28% -4.57%
Avg Days to Max Decline   7 7 10 7 9 6 13 12 9 9 4
2021 Contract Condition   Yes Yes Yes Yes Yes Yes   Yes   Yes  
Action   Yes Yes Yes Yes Yes No   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   37 38 38 38 38 38 38 38 38 38 38
Closed Lower   15 12 12 14 12 16 17 17 18 14 10
Penetrated Low   9 7 8 7 8 9 13 10 12 8 5
Scenario Percentage   60% 58% 67% 50% 67% 56% 76% 59% 67% 57% 50%
Avg Max Decline   11.45% 11.96% 4.74% 5.85% 8.67% 12.68% 10.42% 8.92% 12.51% 7.68% 2.28%
Max Decline   42.43% 36.41% 8.13% 14.21% 27.60% 21.92% 23.82% 20.78% 46.75% 32.22% 3.78%
Avg Days To Max Decline   14 14 15 18 18 17 16 16 19 11 10
Avg Max Increase   -2.06% -1.53% -1.32% -1.59% -1.42% -1.22% -1.41% -2.93% -1.28% -1.83% -1.58%
Max Increase   -7.04% -4.10% -4.06% -2.38% -3.10% -3.28% -6.60% -9.97% -3.54% -4.35% -7.22%
Avg Days to Max Increase   5 7 6 13 12 6 6 13 8 7 3
2021 Contract Condition               Yes   Yes    
Action               No   Not Yet    
High 7960.00 8508.00 9015.00 9373.00 9595.00 9662.00 9841.00 9774.00 9767.00 9810.00 9945.00  
Low 7459.00 7755.00 8115.00 8515.00 9080.00 9181.00 9403.00 9087.00 9256.00 9224.00 9368.00  
Close/Last 7913.00 8115.00 8714.00 9080.00 9430.00 9629.00 9696.00 9587.00 9700.00 9393.00 9806.00  

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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.