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Optimizing Your Stock Selection With the Williams True Seasonal Indicator

Every trader has preferred ways to find market opportunities and select tradable stocks. Among these methods, which exist in great numbers, are those that…

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Every trader has preferred ways to find market opportunities and select tradable stocks. Among these methods, which exist in great numbers, are those that concern "seasonality" or market patterns that tend to repeat, according to the calendar.

If you're not entirely familiar with seasonality, it might not make much sense at first with regard to individual stocks. It makes sense with agricultural commodities simply because weather determines planting and harvest seasons. It also makes sense with energy commodities because, again, cold and hot weather tend to influence supply. Broad stock market seasonality might also make sense because holidays affect consumer buying behavior (think Santa Claus Rally).

However, individual stocks can and do have their seasonality patterns. What drives them? Anything from earnings season and consumer spending patterns to inventory levels, interest rates, and political events.

How Can I Detect Seasonality Patterns for Individual Stocks?

Finding seasonality-based trading opportunities on an individual stock level can be tricky. There aren't many indicators that can do this. This "gap" is what the Williams True Seasonal indicator aims to fill—basically, detecting seasonal patterns on the scale of individual securities.

What is the ‘Williams True Seasonal' Indicator?

Developed by Larry Williams in 1973, the Williams True Seasonal is a technical indicator designed to identify seasonal trends in the price of a security. As with most seasonality indicators, it measures the difference between a security's price and its average price over a specific period.

What Makes the Williams True Seasonal Different from Other Indicators?

The Williams True Seasonal differs from other seasonal indicators in its use of data. More specifically, it avoids using out-of-sample data. For example, if you wish to determine the seasonal data for 2010, only the data up to 2010 would be employed.

Other seasonal indicators might use post-2010, which is a bit "off" considering that it's using future data to calculate past seasonality. By limiting its data, the Williams True Seasonal might provide a more precise read on a stock's seasonality.

Which time frame works best for the Williams True Seasonal? It works best for weekly and daily charts. That's how Larry Williams designed it.

How to Use the Williams True Seasonal to Identify Tradable Stocks

Let's take a look at the weekly SPDR Gold Shares ETF (GLD) below.

CHART 1: WEEKLY CHART OF GLD. Contrary to popular wisdom, the summer months may not be the best months to load up on gold.Chart source: StockChartsACP. For educational purposes.



The Williams True Seasonal indicator is available in StockChartsACP as a plug-in.

Once you've installed it, scroll down the available indicators list (it's below the standard indicators), select Williams True Seasonal, and you'll be ready to apply this indicator to your analysis.


Looking closely at the Williams True Seasonal indicator, note the following:

  • GLD tends to rise before the beginning of the year and peaks in April.
  • Note how the pink dashed line highlighting this peak-to-trough in the Williams True Seasonal correlates with the blue dashed line on GLD's price chart.
  • Note that the April peaks look differently depending on whether GLD is trending or not (and this can affect the way you trade GLD).
  • According to this seasonal pattern, it would be wise to buy gold toward the end of the year; if the market is not trending upward, it might even be a wise decision to sell around April. Come this December, will the end of 2023 offer another compelling buy point?
  • Still, you have to be flexible, as not all buy (or sell) points match perfectly with the indicator (although it comes pretty close to it), and some volatile moves, such as the one we saw in 2020, can occur.

Next, let's look at a weekly chart of IBM.

CHART 2: WEEKLY CHART OF IBM. Seasonal demand for IBM products may correspond with annual business spending toward the first of the year.Chart source: StockChartsACP. For educational purposes.

IBM makes for an ideal case because its seasonal peaks and troughs are so well-defined. IBM's buy point is toward the beginning of the year. In 2020, the big COVID Crash may have offset this seasonal trend, but it remained intact despite the uncertainties that pervaded global markets and economies. The Williams True Seasonal projects another buy point in 2024. That could mean IBM's share price might dip before resuming this seasonal trend.

Now, let's look at the Williams True Seasonal applied to daily charts.

CHART 3: DAILY CHART OF MCDONALDS (MCD). Do the troughs in the Williams True Seasonal indicator signal more burger cravings and spending or investment at the end of the first quarter of the year?Chart source: StockChartsACP. For educational purposes.

Since the decline in 2020, McDonald's (MCD) began exhibiting seasonal buy points in late March. The dips in the Williams True Seasonal indicator are quite pronounced, and although the market action corresponding to these buy points varies slightly, MCD has generally been on an uptrend, and the next buy point signal may take place again in late March, should the seasonal trend continue.

The Bottom Line

The Williams True Seasonal is not so much a timing indicator as it is an early warning signal and a stock selection tool. Trading the markets with a clear view of seasonality patterns can give you a significant advantage. While the Williams True Seasonal is a potent tool, combining it with other indicators he developed, such as those for timing markets, can help sharpen your approach and trading performance.


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

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Simple blood test could predict risk of long-term COVID-19 lung problems

UVA Health researchers have discovered a potential way to predict which patients with severe COVID-19 are likely to recover well and which are likely to…

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UVA Health researchers have discovered a potential way to predict which patients with severe COVID-19 are likely to recover well and which are likely to suffer “long-haul” lung problems. That finding could help doctors better personalize treatments for individual patients.

Credit: UVA Health

UVA Health researchers have discovered a potential way to predict which patients with severe COVID-19 are likely to recover well and which are likely to suffer “long-haul” lung problems. That finding could help doctors better personalize treatments for individual patients.

UVA’s new research also alleviates concerns that severe COVID-19 could trigger relentless, ongoing lung scarring akin to the chronic lung disease known as idiopathic pulmonary fibrosis, the researchers report. That type of continuing lung damage would mean that patients’ ability to breathe would continue to worsen over time.

“We are excited to find that people with long-haul COVID have an immune system that is totally different from people who have lung scarring that doesn’t stop,” said researcher Catherine A. Bonham, MD, a pulmonary and critical care expert who serves as scientific director of UVA Health’s Interstitial Lung Disease Program. “This offers hope that even patients with the worst COVID do not have progressive scarring of the lung that leads to death.”

Long-Haul COVID-19

Up to 30% of patients hospitalized with severe COVID-19 continue to suffer persistent symptoms months after recovering from the virus. Many of these patients develop lung scarring – some early on in their hospitalization, and others within six months of their initial illness, prior research has found. Bonham and her collaborators wanted to better understand why this scarring occurs, to determine if it is similar to progressive pulmonary fibrosis and to see if there is a way to identify patients at risk.

To do this, the researchers followed 16 UVA Health patients who had survived severe COVID-19. Fourteen had been hospitalized and placed on a ventilator. All continued to have trouble breathing and suffered fatigue and abnormal lung function at their first outpatient checkup.

After six months, the researchers found that the patients could be divided into two groups: One group’s lung health improved, prompting the researchers to label them “early resolvers,” while the other group, dubbed “late resolvers,” continued to suffer lung problems and pulmonary fibrosis. 

Looking at blood samples taken before the patients’ recovery began to diverge, the UVA team found that the late resolvers had significantly fewer immune cells known as monocytes circulating in their blood. These white blood cells play a critical role in our ability to fend off disease, and the cells were abnormally depleted in patients who continued to suffer lung problems compared both to those who recovered and healthy control subjects. 

Further, the decrease in monocytes correlated with the severity of the patients’ ongoing symptoms. That suggests that doctors may be able to use a simple blood test to identify patients likely to become long-haulers — and to improve their care.

“About half of the patients we examined still had lingering, bothersome symptoms and abnormal tests after six months,” Bonham said. “We were able to detect differences in their blood from the first visit, with fewer blood monocytes mapping to lower lung function.”

The researchers also wanted to determine if severe COVID-19 could cause progressive lung scarring as in idiopathic pulmonary fibrosis. They found that the two conditions had very different effects on immune cells, suggesting that even when the symptoms were similar, the underlying causes were very different. This held true even in patients with the most persistent long-haul COVID-19 symptoms. “Idiopathic pulmonary fibrosis is progressive and kills patients within three to five years,” Bonham said. “It was a relief to see that all our COVID patients, even those with long-haul symptoms, were not similar.”

Because of the small numbers of participants in UVA’s study, and because they were mostly male (for easier comparison with IPF, a disease that strikes mostly men), the researchers say larger, multi-center studies are needed to bear out the findings. But they are hopeful that their new discovery will provide doctors a useful tool to identify COVID-19 patients at risk for long-haul lung problems and help guide them to recovery.

“We are only beginning to understand the biology of how the immune system impacts pulmonary fibrosis,” Bonham said. “My team and I were humbled and grateful to work with the outstanding patients who made this study possible.” 

Findings Published

The researchers have published their findings in the scientific journal Frontiers in Immunology. The research team consisted of Grace C. Bingham, Lyndsey M. Muehling, Chaofan Li, Yong Huang, Shwu-Fan Ma, Daniel Abebayehu, Imre Noth, Jie Sun, Judith A. Woodfolk, Thomas H. Barker and Bonham. Noth disclosed that he has received personal fees from Boehringer Ingelheim, Genentech and Confo unrelated to the research project. In addition, he has a patent pending related to idiopathic pulmonary fibrosis. Bonham and all other members of the research team had no financial conflicts to disclose.

The UVA research was supported by the National Institutes of Health, grants R21 AI160334 and U01 AI125056; NIH’s National Heart, Lung and Blood Institute, grants 5K23HL143135-04 and UG3HL145266; UVA’s Engineering in Medicine Seed Fund; the UVA Global Infectious Diseases Institute’s COVID-19 Rapid Response; a UVA Robert R. Wagner Fellowship; and a Sture G. Olsson Fellowship in Engineering.

  

To keep up with the latest medical research news from UVA, subscribe to the Making of Medicine blog at http://makingofmedicine.virginia.edu.


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The hostility Black women face in higher education carries dire consequences

9 Black women who were working on or recently earned their PhDs told a researcher they felt isolated and shut out.

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Isolation can make opportunities elusive. fotostorm via Getty Images

Isolated. Abused. Overworked.

These are the themes that emerged when I invited nine Black women to chronicle their professional experiences and relationships with colleagues as they earned their Ph.D.s at a public university in the Midwest. I featured their writings in the dissertation I wrote to get my Ph.D. in curriculum and instruction.

The women spoke of being silenced.

“It’s not just the beating me down that is hard,” one participant told me about constantly having her intelligence questioned. “It is the fact that it feels like I’m villainized and made out to be the problem for trying to advocate for myself.”

The women told me they did not feel like they belonged. They spoke of routinely being isolated by peers and potential mentors.

One participant told me she felt that peer community, faculty mentorship and cultural affinity spaces were lacking.

Because of the isolation, participants often felt that they were missing out on various opportunities, such as funding and opportunities to get their work published.

Participants also discussed the ways they felt they were duped into taking on more than their fair share of work.

“I realized I had been tricked into handling a two- to four-person job entirely by myself,” one participant said of her paid graduate position. “This happened just about a month before the pandemic occurred so it very quickly got swept under the rug.”

Why it matters

The hostility that Black women face in higher education can be hazardous to their health. The women in my study told me they were struggling with depression, had thought about suicide and felt physically ill when they had to go to campus.

Other studies have found similar outcomes. For instance, a 2020 study of 220 U.S. Black college women ages 18-48 found that even though being seen as a strong Black woman came with its benefits – such as being thought of as resilient, hardworking, independent and nurturing – it also came at a cost to their mental and physical health.

These kinds of experiences can take a toll on women’s bodies and can result in poor maternal health, cancer, shorter life expectancy and other symptoms that impair their ability to be well.

I believe my research takes on greater urgency in light of the recent death of Antoinette “Bonnie” Candia-Bailey, who was vice president of student affairs at Lincoln University. Before she died by suicide, she reportedly wrote that she felt she was suffering abuse and that the university wasn’t taking her mental health concerns seriously.

What other research is being done

Several anthologies examine the negative experiences that Black women experience in academia. They include education scholars Venus Evans-Winters and Bettina Love’s edited volume, “Black Feminism in Education,” which examines how Black women navigate what it means to be a scholar in a “white supremacist patriarchal society.” Gender and sexuality studies scholar Stephanie Evans analyzes the barriers that Black women faced in accessing higher education from 1850 to 1954. In “Black Women, Ivory Tower,” African American studies professor Jasmine Harris recounts her own traumatic experiences in the world of higher education.

What’s next

In addition to publishing the findings of my research study, I plan to continue exploring the depths of Black women’s experiences in academia, expanding my research to include undergraduate students, as well as faculty and staff.

I believe this research will strengthen this field of study and enable people who work in higher education to develop and implement more comprehensive solutions.

The Research Brief is a short take on interesting academic work.

Ebony Aya received funding from the Black Collective Foundation in 2022 to support the work of the Aya Collective.

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US Economic Growth Still Expected To Slow In Q1 GDP Report

A new round of nowcasts continue to estimate that US economic activity will downshift in next month’s release of first-quarter GDP data. Today’s revised…

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A new round of nowcasts continue to estimate that US economic activity will downshift in next month’s release of first-quarter GDP data. Today’s revised estimate is based on the median for a set of nowcasts compiled by CapitalSpectator.com.

Output for the January-through-March period is currently projected to soften to a 2.1% increase (seasonally adjusted annual rate). The estimate reflects a substantially softer rise vs. Q4’s strong 3.2% advance, which in turn marks a downshift from Q3’s red-hot 4.9% increase, according to government data.

Today’s revised Q1 estimate was essentially unchanged from the previous Q1 nowcast (published on Mar. 7). At this late date in the current quarter, the odds are relatively high that the current median estimate is a reasonable guesstimate for the actual GDP data that the Bureau of Economic Analysis will publish in late-April.

GDP rising at roughly a 2% pace marks another slowdown from recent quarters, but if the current nowcast is correct it suggests that recession risk remains low. The question is whether the slowdown persists into Q2 and beyond. Given the expected deceleration in growth on tap for Q1, the economy may be flirting with a tipping point for recession later in the year. It’s premature to make such a forecast with high confidence, but it’s a scenario that’s increasingly plausible, albeit speculatively so for now.

Yesterday’s release of retail sales numbers for February aligns with the possibility that even softer growth is coming. Although spending rebounded last month after January’s steep decline, the bounce was lowr than expected.

“The modest rebound in retail sales in February suggests that consumer spending growth slowed in early 2024,” says Michael Pearce, Oxford Economics deputy chief US economist.

Reviewing retail spending on a year-over-year basis provides a clearer view of the softer-growth profile. The pace edged up to 1.5% last month vs. the year-earlier level, but that’s close to the slowest increase in the post-pandemic recovery.

Despite emerging signs of slowing growth, relief for the economy in the form of interest-rate cuts may be further out in time than recently expected, due to the latest round of sticky inflation news this week.

“When the Fed is contemplating a series of rate cuts and is confronted by suddenly slower economic growth and suddenly brisker inflation, they will respond to the new news on the inflation side every time,” says Chris Low, chief economist at FHN Financial. “After all, this is not the first time in the past couple of years consumers have paused spending for a couple of months to catch their breath.”


How is recession risk evolving? Monitor the outlook with a subscription to:
The US Business Cycle Risk Report


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