Seasonality And Sentiment Screen

Jason Goepfert

2016-10-04

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Near the beginning of each month, we try to run a Seasonality and Sentiment screen, which takes a look at the commodities and ETFs we track that have a tendency to rise (or fall) this month as well have a current Optimism Index reading that's near an extreme.

Among ETFs, it's clear that rate-sensitive issues have taken a hit to sentiment. The Optix is only 6% on utilities (XLU), and is also low on a few other defensive groups which have tended to show positive average returns in October.

At the other end of the spectrum, India (PIN) has tended to decline in October with a -2.4% average return, yet it's Optix is high at 80%. Russia is also a getting extended during a period when it doesn't show the best average return.

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Among commodities, cattle and hogs are showing pessimism, but this is a seasonally weak period for hogs. Not so much for cattle, however. Wheat and corn also have low optimism in a seasonally strong window.

The precious metals, getting hit today, kind of deserved it. Both silver and gold are showing relatively high optimism during a seasonal weak spot.

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