This year, the seasonal market trends were a bust. Nearly everyone simply did not work out.

However, that actually is nothing new. If you do a 25 year chart on the major indices, you will establish that some years simply don’t work. But what you will also see is that in nearly all years, they usually do.

What does this indicate for us going into 2010?

It means that 2009 was one of those odd years where seasonality did not work meaning that in 2010, seasonality will in all probability work again.

The initial recurring trend will be upon us in just a couple of weeks, so let’s do a fast review.

The stock market has reasonably consistent and dependable seasonal trends. You must understand the most well-known cyclic trends, because this information can prevent you from being overly bullish at a cyclic peak or extremely bearish at a seasonal low.

In a nutshell, the common trends favor a drop in early January (perhaps profit-taking selling), followed by a mid-January rally. By late March or early April the market often reaches a peak, followed by a changing market in mid-April, maybe related to the April 15 tax deadline. The early summer months are regularly characterized by a midsummer rally, culminating in a market top in late July or early August. September and October are normally down months in the stock market (witness the 1929 Crash and the 1987 October decline), with the lows occurring sometime in late October (a good buying opportunity?). The trend into the end of the year is typically bullish, with the first two weeks in December characterized by a strong market. The Christmas holidays are typically calm, with jerky and thin markets. There are always exceptions to these valid trends, but the general pattern is really dependable.

Print this article if you have to and stick it near your trading monitor. I believe that because 2009 was a unusual bust for the majority of the seasonal trends discussed above, 2010 will be an on year. One of the main errors amateur traders make is that they get sniped by more advanced fighters who know the seasonality trends.

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