The Reason Is Not the Season

This column was originally published on RealMoney on Nov. 22 at 1:04 p.m. EST. It's being republished as a bonus for TheStreet.com readers.

As we head into the year-end, the biggest debate on the Street seems to be whether or not the seasonal "year-end rally" (YER) is so anticipated that it won't occur. It's remarkable how much of the bullish argument for the YER is based on the seasonality play, particularly because that play hasn't worked this year -- at all.

I'll be blunt -- I never have and never will make a trade based on seasonality, as there are too many moving parts and too many real inputs that affect the market at any given juncture to put too much weight into something that can be so arbitrary. That said, I don't mind being on the same side with history. Unfortunately for those who do put a lot of weighting into seasonality, 2005 has been a disaster. In fact, it's almost been a year of uncanny un-seasonality.

I mean, along with the year-end, the new year is also supposed to be a historically seasonally strong time of year. But it was Jan. 3 this year when the market collapsed and continued cratering though the "seasonally bullish" spring, leaving the Nasdaq down double digits by the time the summer arrived. ...