Have you ever noticed how certain holidays or seasons seem to bring different vibes or activities? Just like how summer is great for the beach and winter for snowball fights, the stock market also has its own patterns that repeat over time. These patterns are called seasonal trading strategies. Think of them as the market’s favorite times to rise or dip, much like how flowers bloom in spring or leaves fall in autumn. By understanding these seasonal trends, traders try to make smart decisions about when to buy or sell stocks to earn more money. In this article, we’ll dive into some cool seasonal trading strategies and show you how recognizing these patterns can make trading a bit like predicting the weather—helping you stay ahead and make better choices!
Seasonality has long been used in trading and investing: the idea that certain patterns in market returns repeat at similar times each year. In his book Quantitative Investing: Strategies to Exploit Stock Market Anomalies for All Investors, Fred Piard explores…
The January Barometer is a seasonal trading strategy that worked over many decades. While the traditional January Effect seems to be arbed away, the January Barometer has worked well for many decades. This is the January effect that works – the January…
Christmas Day is one of the federal holidays in the US. But how does it affect the US financial markets? Is there a Santa Claus rally in stocks? Can we develop trading strategies for this holiday season? Our trading strategy…
Christmas Day is one of the federal holidays in the US. It’s a well-known “fact” that there is normally a Santa Claus rally in stocks, but do we see the same tendencies in the gold price? Is there a Christmas/Santa…
Can we develop a Thanksgiving holiday seasonal trading strategy? Is Thanksgiving bullish or bearish for stocks? Thanksgiving Day is one of the federal holidays in the US. The day after Thanksgiving is called Black Friday and is a day when consumers…
The lunchtime effect in the stock market, particularly in the U.S., refers to a noticeable pattern where trading volumes and returns drop during lunch hours, typically between 11:30 AM and 1:00 PM. This phenomenon has been observed across various markets…
The $3.5 billion “secret”: how a bias skews S&P 500 option payoffs every month! In this blog post, we tell you how retail and prop traders make money on the options expiration day (OPEX). For investors and traders in the S&P…
The worst week of the year for stocks is the last week of September, after the third Friday of the month. September is a poor month for stocks, especially the week after OPEX day, which is the third Friday of…
The 4th of July (Independence Day) is one of the federal holidays in the US. How does it affect the US financial markets? The US financial markets do not open on the 4th of July, being a federal holiday to…
Are you wondering if there’s a perfect day to buy stocks and boost your investment returns? Many investors have asked, “What is the best day of the week to buy stocks?” While historical patterns and market theories suggest some days…
Some traders believe they can use the phases of the moon cycle (lunar cycles), such as the full moon, to time the market and make profitable trading decisions. This has given rise to the Full Moon/Moon Phases/Lunar Cycles Trading Strategies….
Easter is a Christian holiday celebrated across the world. But does it affect trading on the U.S. stock exchanges and other financial markets? We look at how the stock market performs before and after the Easter holiday. Additionally, we specifically…
Seasonal changes and Seasonality trading strategies play a big role in financial markets and can really affect how much money traders make. When traders spot patterns that happen regularly, they can make smarter trades and maybe earn more money than…
Let’s look at the tax day trading strategy because most US taxpayers have a deadline on the 15th of April to file their tax returns. If the date is on a Saturday, Sunday, or legal holiday, the due date is…
Quad witching (quadruple witching) refers to the expiry of four financial derivative contracts on the same day: stock index futures, stock index options, single stock options, and single stock futures (the latter have low volumes and are most likely not…
St. Patrick’s Day is an important day for Catholics. Is the day just as green for stocks as for those celebrating? St. Patrick’s Day is one of the best days of the year for stocks, but that is thanks to…
The options expiration happens on the Friday before the 3rd Saturday of each month in the US. An often referred to effect is the options expiration week effect. Is this effect real, or is it just a myth? In this…
The Turnaround Tuesday Trading Strategy The Turnaround Tuesday effect happens from the close of Monday’s trading session until (at least) the close of Tuesday’s trading session. The effect is no myth! Let’s do some backtesting to find what seems to…
The Valentine’s Day rally is an annual event in which stock prices tend to increase in anticipation of the romantic holiday. The rally has been studied extensively by investors and economists alike, with a variety of conclusions drawn from the…
Given that the Super Bowl is such a big event for Americans, can we spot any seasonal trends before and after the event? Is the Super Bowl bullish or bearish for stocks and bonds? Is there a Super Bowl indicator?…
George Washington’s Day/Presidents’ Day is a federal holiday in the US. But does it affect the US stock market? The US financial markets do not open on George Washington’s Day or Presidents’ Day. Trading does not take place on any…
Martin Luther King Jr. Day is one of the federal holidays observed in the US. How does it affect trading on the US stock markets? The US financial markets do not open on Martin Luther King Jr. Day, which is…
The January Effect Stock Market is a well-known seasonality and anomaly. The January Effect was first observed by investment banker Sidney Wachtel in 1925. It refers to the tendency for stock prices to rise in January. This anomaly has puzzled investors…
There are many seasonals in the financial markets. Today, we are looking at the performance for stocks, bonds, and gold when a new year starts. Is there a start of the year rally? Related reading: Start of the year rally…
As the year is drawing to a close, you might have heard about an end-of-year stock market rally. Is this seasonality true, fiction, or myth? The end of year rally is no myth or fiction: research shows that stocks tend to…
The Santa Claus Rally in DAX and Euro Stoxx 50 Our backtests show significantly better performance during the Christmas season and the end of the year. The Santa Claus rally is no myth in Europe, either! The end of year…
Friday the 13th has long been associated with bad luck, though the exact origin of the superstition is not known (to our knowledge). Those who grew up reading Donald Duck know the bad luck that happened on Friday the 13th….
Can we develop a Thanksgiving holiday seasonal trading strategy? Is Thanksgiving bullish or bearish for stocks? Thanksgiving Day is one of the federal holidays in the US. The day after Thanksgiving is called Black Friday and is a day when…
For many years, we have witnessed a weekend effect in Bitcoin from late Friday to late Monday. Moreover, volume tends to drop, and perhaps the lack of volume makes the price go up. Key takeaways: Introduction to the Weekend Effect…
As with many other sociopolitical events, election periods affect stock market performance. Although forecasting the market is mostly futile, previous tendencies in Election Day Performance in Stock Markets before, during, and after election day can be a good guide. But…
With the Federal Reserve set to cut interest rates while the S&P 500 hovers near an all-time high, history suggests this could bode well for stock market performance in the coming months. Historically, such rate cuts have often acted as…
The stock market has long been subject to various theories, patterns, and beliefs, some more traditional than others. One intriguing concept is the possible influence of the Chinese Zodiac on stock market performance. In this article, we’ll analyze the S&P…
The phrase “Sell Rosh Hashanah, Buy Yom Kippur” has been a cornerstone of trading “folklore” for decades, at least since Eisenhower was president. Its origins trace back to a belief that September, when these Jewish holidays typically fall, is a…
The Ultimo Effect is a fascinating seasonality pattern in the stock market that savvy traders use to their advantage. Observed during the final days of each month, the Ultimo Effect refers to a tendency for stock prices to rise as…
What are the worst days of the year for trading stocks? Let’s find out and test from the year 2000. We did a backtest where we optimized the month and trading day to find the WORST trading days for the…
The first day of the month seasonality is strong in most markets. We have previously written about the turn of the month trading strategy, but today we look at the first trading day of the month. The turn of the…
We made a table that summarizes the best and worst trading days of the month. Because the length of the month varies from month to month (and some months have holidays), we made two tables: one from the start of…
Research shows higher stock market returns from November through April than for the rest of the year. Can we confirm that there is a Halloween effect in trading? Yes, there is a Halloween effect in trading. From November to April,…
New Year’s Eve is often a time for optimism and celebration. Does this spill over to the stock market? Is there a New Year’s eve effect in stocks? There is no particular seasonal New Year’s Eve effect in stocks, but…
What is the worst month of the year for stocks? Let’s look at the statistics for the last 50 years and find out. It turns out the historical performance of the months varies a lot. Some months are better than…
Day of the week effect In trading. The weekday effect in trading can be a handy trading edge because trading is about exploiting small trading edges in the market. If you work hard and diversify with different markets, time frames,…
The end-of-month bias (effect) in stocks is well documented. But how strong is the bias? We conduct a simple test to show how strong the effect is. The return in the S&P 500 at the end of the month is…
September is known for being the worst month of the year for stocks. But is it always like this? We ran some backtests: First, let’s backtest the performance of all months since 1960: The first column shows the month, and…
Below you can find the gain each year from 1997 until 2011 in OBX. It’s divided into two: The whole of December and the 2nd half of December. The 2nd half is from the close of the 15th or the…
The fourth quarter is a strong period for stocks. But which five-day period is best? We did a test to find out which calendar days of which month produce the best five-day returns. The best five-day periods to own stocks…
The Memorial Day holiday is one of the federal holidays in the US. How does it affect trading in the US financial markets? The US financial markets do not open on Memorial Day because it is a federal holiday. Trading…
Is there a distinct trend in the U.S. stock market’s returns during the closing days of calendar quarters? Do investment funds strategically allocate cash to drive up stock prices to enhance portfolio values in quarterly reports? Is there a unique…
Next week is OPEX week (options expiration), and it’s also quadruple witching week. How have the markets performed that week? Let’s have a look at S&P 500 (SPY) and how it performs for the respective months during this week. Trading…
Seasonal trends in the financial markets are many, and the stock market is no exception. Some months are better than others. What is the weakest month in the stock market? The weakest month in the stock market is September. The…
20+ treasury bonds (TLT) show a significantly different performance depending on the day of the week. Is there any day of the week effect in TLT? Let’s test some day of the week strategies. Assume we start with an account…
The Euro Stoxx 50 has mixed performance the week after futures expiration. Euro Stoxx 50 is a very popular trading vehicle. It’s one of the most traded futures contracts in the world. The contracts expire on the third Friday of…
The Labor Day holiday is one of the federal holidays observed in the US. But does it affect the US financial markets? The US financial markets do not open on the Labor Day holiday, which is the first Monday in…
SPY seasonality trading can be very profitable if done correctly. We like SPY seasonality and have made plenty of SPY seasonality trading. In this article, we look at several SPY seasonality patterns. But first, what is a SPY seasonality? What…
One of the strongest seasonal anomalies in the stock market is the end-of-month effect. Let’s have a look at how it performs in August/September: The trading rules for the strategy are like this: Trading Rules We go long at the…
If you’re scouring the calendar for the best trading day of the month, the search ends with actionable insights. Short on speculation and long on evidence, this article zeroes in on the critical question – what is the best trading…
The end-of-month seasonality is strong in stocks. A more updated version of the end-of-month effect was made not so long ago. Let’s make an update and see how it has performed since then: End of Month Trading Strategy In plain…
Yes, our backtests indicate that there is an end of month effect in Bitcoin and this can potentially be a viable turn of the month trading strategy. The end of month effect, sometimes referred to as the turn of the…
The US stock market has a few 3-day weekends (Long weekends) during a calendar year. Is that a buying opportunity? Do stocks drop or rise before a 3-day weekend? In this article, we backtest the performance of a 3-day weekend.Trading…
What time of the day is the most volatile in trading? Most traders assume the first and last hour of trading (in any market) is the most volatile of the day. News from overnight trading needs to be discounted when…
Are there any monthly seasonalities in TLT? Yes, just like in stocks there are some strong and weak months. August is, by far, the best month. We are now entering the best month over the last 20 years in long-term…
There are many effects and seasonalities in the stock market. One frequently mentioned seasonality is the first trading day of the month effect. Is the first trading day of the month effect a myth or fact? In this article, we…
A good short-term trader preys on volatility. However, volatility can also backfire. What day of the month is stocks’ most volatile? The most volatile day of the month is the first. There are a few other volatile trading days as…
Is it smart to own stocks over the weekend? On of the biggest financial websites writes that the weekend effect is a phenomenon in financial markets in which stock returns on Mondays are often significantly lower than those of the…
We are strong believers in seasonal trading strategies, and one of the best seasonalities is specific trading days of the month. Most articles about seasonal trading refer to calendar days, but a much more accurate trading term is the trading…
The Santa Claus Rally In Emerging Markets One of the seasonal strongest periods is approaching: the Christmas holiday. The Santa Claus Rally or the end of the year effect has proven to show strong gains in the US markets and…
One of the most important factors in becoming a good trader is to know when you should NOT trade. The art of when to do nothing and just sit on your hands is just as important as anything else. So,…
There are many seasonal patterns in the US market. For example holiday effects, the end of month effect, the first day of month, and, of course, the ‘Sell in May and go away’ strategy. However, there is also a investing…
We have in a previous article determined that there is a positive holiday effect in stocks. This effect happens on the days before the holiday. But is there an opposite effect? Is there a post-holiday effect in the stock…
Can we find the same Santa Claus Rally in NIFTY as we do in the US? We are approaching perhaps the strongest two/three weeks of the year: the Santa Claus Rally or the end of the year effect. We have…
Monday is the most volatile day of the week for stocks. Volatility can be both good and bad. It’s to your benefit when you get it right but the opposite when you get it wrong. Thus, it might be of…
Many investors focus on searching for seasonalities in the US stock market. However, seasonal patterns can also be exploited in international stock markets. Today we will show you a seasonal trading strategy for the German stock market. It is based…
There is no best trading hour. Backtests of five different futures contracts reveal that most of the price action is random throughout the trading day. However, by implementing one or two extra variables we find some potential trading edges or…
The Euro Bund futures contract shows weak seasonal performance during the futures expiration week. The contract has ticker code FGBL, is issued by Germany, has a maturity between 8.5 and 10.5 years, and one contract has a value of 100…
The end-of-month effect (also called the Ultimo Effect) is a well-known trading strategy in the stock market. We have covered this anomaly before. Perhaps what is lesser known is that the effect spills over to the first three days of…
We did a backtest where we optimized the month and calendar day to find the best calendar days for the S&P 500. We backtested the result by entering at the close of calendar day N and selling at the close…
The Best 6 Months Timing Model strategy by Yale Hirsch is an active and simple strategy that uses market timings and can be implemented using any asset class and portfolio. Using this strategy, you do not need to be in…
The Congressional Effect in stocks– we suspect you have never heard of it. Neither had we! But this is one of the many seasonal effects in the stock market. The man behind the effect, hedge fund manager Eric Singer, had…
We did a backtest where we optimized the month and trading day to find the best trading days for the S&P 500 from the year 2000. We remind you that the TRADING day is different from the calendar day. We…
We are approaching the end of September; historically, the end and beginning of a month have been positive. We have covered this anomaly multiple times for the S&P 500/SPY. Let’s find out how Dow Jones Industrial and its ETF (DIA)…
Rosh Hashanah in commonly known as the Jewish New Year. This, of course, means a lot for Jewish people, who celebrate it during a three-day holiday. But during that timeframe, the market is generally open. Can we make a profitable…
Calendar effects are pretty well known in the stock market, but it’s not many articles out there about calendar effects in long-term Treasuries (TLT). TLT seasonal trading strategies are hard to come by on the internet, but below you get…
Trading Strategies for Futures Expiration Week. Our backtests indicate that both DAX 40 and Euro Stoxx 50 have much better performance during the futures expiration week compared to any other random week. Let’s start with the DAX 40 contract: DAX…
“Sell in May and Go Away” is a strategy suggesting investors should sell stocks in May and buy back in November to avoid typically weaker markets from May to October. The effectiveness is debated, as results vary year by year….
The Friday seasonality in crude oil trading revolves around a straightforward principle: purchasing oil assets on Thursdays, anticipating a price increase on Fridays. However, the efficacy of this strategy isn’t uniform across all Thursdays. Research indicates that it yields more…
In the United States, a presidential election is held every four years. Those presidential elections have been observed to affect many government sectors, including legislation, international relations, and even the stock market. This occurrence inspired the concept of 4-year presidential…
Our backtests suggest that NIFTY 50 has a positive end of month effect. A variation of the inputs does not change the result dramatically, thus the end of month effect seems reasonably robust. The end of month effect is well…
The coming week is the OPEX week of October. We are entering a historically strong seasonal tendency in the stock market (from OCT to APR), and it might be interesting to find out how stocks have performed this particular week…
The even vs. odd days trading strategy shows that most of the gains in the S&P 500 come on even days, not on odd days. It’s a rather peculiar effect but most likely the result of chance. Can we develop…
Backtests and statistics of five different futures contracts reveal that most of the price action is random throughout the trading day. However, by implementing one or two extra variables, we find some potential trading edges or strategies. Let’s go straight…
Bitcoin is traded 24/7 and there exists a few seasonal patterns. For example, being invested from 5 PM to 7 PM any day has paid off well, and so has being invested on certain days. Let’s look at a Bitcoin…
A well-known “fact” is the end-of-month rally in stocks at the end of the month and the first day(s) of the next month. It’s a lot about it on the web, but as far as I can see no actual…
Just like we can develop seasonal trading strategies in the overall stock market, we can find potentially profitable seasonal trading strategies in the retail sector. This article presents one such opportunity. Are there any seasonalities in retail stocks? Some years…
What are the best days to trade stocks? The best days to trade stocks are Tuesdays, the first days of a month, the last days of a month, and the end of the year (4th quarter). Becoming a proficient trader…
Most readers of this website have probably heard about the Turnaround Tuesday effect in the stock market. But does the day of the week matter if it’s a bull or bear market? Let’s look at how the different days of…
Yom Kippur is one of the most important days in the Jewish calendar. However, it is not an official holiday and the market remains open during those days. So the question is, does the market perform well during Yom Kippur?…
The day of the week seasonality effect in stocks is strong. Some days are simply better than others. Previously there has been a certain day-of-week seasonality in the S&P 500. Here is a summary of the average gain since 1….
The Holiday effect system in the stock market is a well-known anomaly and seasonality. Is there a way to profit from the holiday effect seasonality? Are there any holiday effects in the stock markets? If so, which holiday is the…
Holiday effects (or as they are also known calendar effects) are very well-known anomalies in trading. Around these dates, like the 4th of July or Thanksgiving, for example, the market tends to perform better over a short period of time….
When the weekday markets close, weekend trading springs to life, offering distinct opportunities for those ready to tackle its unique challenges. Our guide demystifies the weekend trading strategy, detailing concrete measures to handle the peculiarities of trading cryptocurrencies, commodities, and…
The last trading day of the month offers trading opportunities. This is one of many seasonal trading strategies. Can we make a last trading day of the month trading strategy? The last trading day of the month is a weak…
