March 2016 followed the seasonal trend but the Fed got in the way

If the FOMC had been a bit less dovish, or even if Yellen's latest speech would have left the dollar open for a near-term hike, the month of March would have been another good one for seasonal traders.

But 'what ifs' are worthless and that left a long-term USD/JPY winning streak in jeopardy with one trading day left in the month.

My #1 March forex seasonal trade was USD/JPY. The pair had climbed in March for seven consecutive years, averaging more than a 1% gain. So far this month it's down 0.17%, or 22 pips. If it can post a decent day tomorrow, it can still finish ahead but not by much.

The trade started strong with a 1.2% rally on March 1 but that was the best trading day of the month for longs and the pair peaked on March 2 at 114.56. It was still holding a modest gain at the FOMC but then tumbled to 110.67. Yesterday, it had returned into positive territory but Yellen sunk it again.

Trade #2

The #2 trade on my list was the stock market. "seasonally, there is no better time to buy US stocks," I wrote.

What the Fed took away in the USD/JPY trade, it more than gave back in stocks. The S&P 500 is up 6.8% in the month in a rally that began March 1 and never stopped.

Trade #3

At the end of February I wrote that March was easily the worst month on the calendar for gold. The bull flag was the dominant feature on the chart and it broke to the upside. At one point, gold was up 3.75%, but neither the Fed, a terrorist attack nor Yellen's latest salvo keep it in positive territory. It's been a rough ride but gold is down 0.95% for the month.

Trade #4

I warned oil bears to beware of the bullish seasonals at the end of February. That was a warning that needed to be heeded as oil roared 13.6% in the month. I'll have an April seasonal forex package coming up but an early hint is that it's not time to bet against crude yet.

Trade #5

The time to 'invade' Russia is March. My final seasonal trade in the month was to buy the ruble because of the highly seasonal pattern in the Russian currency dating back to the turn of the century. It was a glorious trade. Of the 154 currencies tracked by Bloomberg, the Russian ruble was the second-best performer in March, trailing only the Brazilian real. It gained 10.49%.

Overall

Like in all trading, you want to have big gains and small losses. There's still time for a perfect score but USD/JPY is currently in narrowly negative territory but it's vastly outweighed by gains of 6.8%, 13.6% and 10.49% on three seasonal trades.