How did the seasonal trades do in November
Here’s a recap:
1) US dollar strength
The US dollar had a great month and was the second-best G10 performer, trailing only the kiwi by a couple pips and making +1% gains against most of the field. On net, the dollar index was up 0.9%, making it now 9 out of the past 10 Novembers with gains.
2) USD/JPY strength
This one drilled down deeper into the US dollar strength. I highlighted that it was the best month on the calendar for the pair and it delivered again with a 1.26% rally.
3) Japanese stocks
I highlighted that the Nikkei 225 had risen in 7 straight Novembers and an average of 3% over the past decade. It delivered again with a 1.6%. Much of that was sapped by the currency if you didn’t hedge. I also highlighted that November was a good month for stocks everywhere including the S&P 500, which rose 3.7%.
4) Oil is a laggard
This is a complicated one and highlights the importance of risk management. November is the worst month of the year for oil but that wasn’t exactly true this month. Or at least it wasn’t until the 5.1% crater today. With that, crude finishes the month almost flat and below where it was when I posted the trade (on Nov 4). Still, this was a tough one to make money with.
5) The natural gas rally continues
After a few days of gains at the start of the month, building off a great October, this went badly. I was long myself and wasted nearly all of the October rally before covering. I’m especially kicking myself because it was a hefty gain that I was strongly considering taking profit on before I took a week off mid-month. Today’s 8.8% drop puts natty back to where it was at the start of October.
6) EUR/GBP weakness
EUR/GBP fell 1.1% in the month in a trade that was never more than 40 pips offside. It steadily fell mid-month and is closing out November near the lows.
I’ll have the December seasonals package out later today.