There was a widely discussed article last week about how seasonality has not been working. That could not be farther from the truth, especially when one considers that seasonality is only a single factor and that there are other factors that drive the market.
2010 started off with a rally followed by a correction right after January options expiration. That is about as typical as it gets. We rallied right through the seasonally strong period at the end of April, even though many other indicators were pointing to a top at the end of March. Seasonality trumped them all. Many claim that "Sell In May and Go Away" did not work. Sure, if you measure from the end of April to the end of October than the gains were small. But there was a 200 point draw down on the S&P 500 in the interim.
Seasonality did not stop me from going long in early July and late September when every other indicator was at a bearish extreme. It did not stop me from shorting a couple of weeks back when we were at bullish extremes. But it definitely deserves to be a factor in one's decision making process. I used the recent correction to tiptoe in on the long side even though the market was nowhere close to bearish extremes. While many factors were involved, a large consideration was seasonality. Had it been Summer I would have waited longer. There is no single indicator that will always work but in my experience seasonality is an indicator worth giving some consideration to in the context of many other factors.