a tough time of year to trade. The fundamentals say one thing and the cycles and charts suggest the opposite. The Bears are feeling good about their last 2-3 months of victories but the Bulls want revenge and have the seasonal price direction into spring and early summer of UP in the bulls favor. So they start making their guesses as early as possible.

The Bears don't stop doing what's been working, so usually the months of Dec, Jan, and Feb the trade tends to wage what I label as a Battle Cycle. It can be chaotic as the fundamentals and technicals are battling over which is the correct bias. Probably why the Feb contract tends to be psychotic since it is the time frame where the fundamentals tend to shift from negative to positive. Six months prior to that the August contract has to deal with the same fundamental shift of positive fundamentals shift to negative fundamentals.

This tends to give us a sideways tilted UP move but from Dec through Feb. May, June, and July already have the increased price move already built in with a 10-20 dollar premium. The Bulls knowing the seasonal price increase will happen, so they start buying their northbound tickets early. During 3 months of Battle Cycle the northbound tends to get filled to the rafters to QUICKLY and BEFORE lower production numbers and seasonal demand show up. This brings the BALANCE ADDICTION into the ball game when too much-too soon happens without confirming fundamentals. It's like a silent Market Rule best described like football regulations and rules of play. Too much-too soon is similar to "too many on the field" its a foul, the team gets a penalty. I tend to see the March Washout that has a consistent track record of happening, as too much-too soon with non confirming fundamentals to support the UP movement during DEC-Feb. The yellow flag gets thrown and the bulls are penalized during the March Washout but with various degrees of penalty yards for the setback to Re-Balance. Each year is different, some are only mild 3-4 dollar setbacks and some years are severe with $10+ penalty yards.

Some will think I've lost it with this description and analogy to a football game. Actually I did have one guy say to me "what the H are you taking about football for, it has nothing to do with the markets". He didn't get it, that I was just trying to illustrate and help him relate as to why the markets do some things that make no sense. Some do get the connection and tell me it helps them view the markets in a less serious tone and understand the markets can do anything they want.