Assessing risk events [Video]
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This video outlines the various risk events that you can search for by using the risk event tool on Seasonax. This is a fantastic tool that allows users to look up a whole range of known market-moving events and their historical patterns.
The events function is located on the left-hand side and allows you to browse different events including Fed minutes, rate cuts, elections, holidays, and other major events known to really move the markets.
Let’s look at the Fed minutes over the last 25 years. You can see that the S&P 500 tends to gain going into the minutes and tends to fall going out of them. This is the kind of dynamic that is very helpful to be aware of.
Let’s look at the history of the Fed rate. You can see that over the last 73 years, on balance, the S&P 500 gains into a Fed rate change and falls out of a Fed rate change.
Now, let’s look at rate hikes. We can see that over the last 25 years, when the Fed hikes, the rate tends to gain into the event and then sell out of the event; and that is a perfect example of ‘buy the rumor, sell the fact’, which you can see from a seasonal perspective.
Author
Giles Coghlan LLB, Lth, MA
Financial Source
Giles is the chief market analyst for Financial Source. His goal is to help you find simple, high-conviction fundamental trade opportunities. He has regular media presentations being featured in National and International Press.
