- Seasonal analysis is the study of how a market tends to move over a set period of time, usually 12 months, and is a reflection of both fundamentals and fund activity in the market.
- The first weekly close of January is important in the Energies sector as three of the four major markets tend to post their low closes before starting on uptrends of varying degrees.
- As one would expect, the picture is not as clear in natural gas, the famed Widow Maker.
Last week, the first week of January, brought with it a renewed focus on the Energies sector. There were the standard headlines about tension in the Middle East, including the ongoing war in the Gaza Strip and militants disrupting shipments across the Red Sea. There is something we have to understand about the energy sector and its multitude of geopolitical factors: There is almost always[i] chaos in the Middle East. For the most part, the markets have factored this in with higher implied volatility readings. Then when something new comes along, like Russia invading one of its sovereign country neighbors, short-term waves can occur in the markets.
