Question

Mention a market trend that is easily predictable in the short term

Answer 1

Making money as an investor is not about successful predictions but about managing the exposure of your capital to market factors on the basis of risk reward, as well as the likelihood of various different things happening. If you can be right half the time, and have a risk:reward of 1:3 and make enough bets in the year then you will be up there with the greats.

It is also about managing the social risks because the better opportunities come from doing something not quite conventional because conventional beliefs are already reflected in the market price. Proportionately many more investors have been fired for being bearish a couple of years too early into the bear markets beginning 2000 and 2007/2008 than for staying bullish into the crisis, because if "everyone" else was wrong, how can you be blamed?

Recurring patterns tend to stop recurring quite dependably the moment too many people take an interest in them - it just has to happen that way, otherwise there would be easy money in a business that is highly competitive.

See for example the January effect, which used to work and is still kind of in play but has become something quite different in its dynamic than what was described by the academics.

Beyond that, the nature of repeating behaviour is that it isn't exact. If it were then identifying it using Fourier analysis and more modern tools would be trivial, yet I never saw a guy get rich that way.

Off the top of my head, and without giving away the crown jewels:

Stock market panics still occur often in October. Once this was because of the timing of the harvest season and the implications for liquidity - farmers would pull their money out from the city banks to regional banks, and this tightened liquidity for financial centres. Yet somehow, even though agriculture has ceased for now to be an important influence on liquidity, we still see this effect in action. One might humorously suggest it is the ghosts of the past. However there are other reasons, which I don't want to describe for now, but the fact that March to April can also be a bit wobbly may be a clue.

Bonds often bottom in July.

Don't be short long dated gilts in the summer.

You mentioned the weather. What happens when it is sunny in New York? Perhaps someone has already studied this...

The coinventor of marginal utility theory, Jevons, was ridiculed by other economists for his obsession with the idea that sunspot activity shaped the business cycle. His theory about a link via agriculture did not fit his time and simply doesn't apply today. By sunspot theories today economists refer to something entirely different. Yet when Jim Simons of Renaissance - one of the leading quant funds of our time - was asked about his approach in an interview he mentioned that they look at everything, even sunspots, but declined to say if he had found anything. Someone curious and open minded might want to look at the data for themselves.