The idea is that if a rally is underway when the October 16 calendar date for seasonal entry arrives, as indicated by the MACD indicator, we will enter at that time. However, if the MACD indicator is on a sell signal when the October 16 calendar date arrives, indicating a market decline is underway, it would not make sense to enter before that decline ends, even though the best average calendar entry date has arrived. Instead, our Seasonal Timing Strategy simply waits to enter until MACD gives its next buy signal, indicating that the decline has ended.

We use the same method to better pinpoint the end of the market’s favorable period in the spring. If MACD is on a sell signal when the calendar exit day of April 20 arrives, we exit at that point. However, if the technical indicator is on a buy signal, indicating the market is in a rally when April 20 arrives, it makes no sense to exit the market just because the calendar date has arrived. So our Seasonal Timing Strategy’s ‘exit rule’ is to simply remain in the market until MACD triggers its next sell signal indicating the rally has ended.