S&P 500

Once again yesterday the seasonal effect failed to have an effect. The fact of the matter at this point is that the seasonal pattern is just not playing out this year. I was aware of it, so I only had 2 contracts on yesterdays day trade compared to the 30 I normally trade. As a result the 5 point loss is barely a normal commission.

This is where some judgement has to come into play with trading. I did it yesterday not by screening a trade completely but through the modificiation of my risk. I know that the day trades to begin with are the least reliable, so already they get half the risk allocated to it that overnight trades do. Next, if we have something so obviously amiss, I reduce the risk further.

The seasonal being completely opposite this year represents that "obviously amiss" category. Maybe we will still get a dip into the fall, but at this point unless that occurs we have to disregard the seasonal pattern, it is out of sync this year so far. I "think" the reason for this is the strong rally in the bond market.