More Articles | Free Reports | Premium Services By Keith Kaplan, CEO, Tradesmith The Santa Claus Rally. Check. The January Effect. Underway. Sell in May and go away. September brings declines and flash-crashes. November through April are the best six months for profits from the S&P 500. These are all examples of seasonality in the stock market. They’re recurring periods of growth or weakness that happen with such astonishing frequency that they’ve become expected, annual events. Like handling plants in your garden, you plant in spring and you enjoy the fruits of your labor in summer or fall. But seasonality doesn’t just apply to the big indexes. Every stock has its own seasons of growth and decline that repeat year after year. Today, on this first Friday of 2025, I want to impress on you how powerful a tool seasonality is. It can accelerate your wealth accumulation hand over fist. And if you’re not using it in your investing arsenal, you’re doing yourself a great disservice. So let’s explore why seasonality is so important to you as an investor. And most important of all, let me show you how to implement it for greater profits. The Power of Market Seasonality Last fall, one of our programmers here at TradeSmith emailed me with a simple request: Watch Nvidia’s stock on October 24. I was intrigued… but not surprised. This programmer had been conducting historical research that projected Nvidia was set to rise an average of 7.8% over the next 15 days. This pattern occurred 100% of the time over the past 15 years. So, I watched the stock. I didn’t know of any obvious catalyst for that day. There were no scheduled company announcements. No Fed meetings. No product demos. Nothing. But sure enough, on October 24,Nvidia shot up. And over the next 15 days, it rose 5.1%. Now, I’m a data scientist – so I immediately started asking questions. As the programmer walked me through the data on NVDA’s price movements, it was clear as day that Nvidia shot up during that 15-day time span every single year. I cannot stress this point enough: There was a 100% hit rate across that period: 15 years… All the way to 2009. Back then, Bitcoin had only just debuted, and the idea of an AI industry, or an AI trade… was science fiction at best. Nvidia was just a company chugging along, making graphics cards for video games and media editors. Still, it kept rising in late October, regardless of news or attention… year after year. Now, on its own, a 5.1% gain isn’t much. But, if you could repeat that modest gain every 15 days, using consistent historical patterns like we saw with NVDA, that’s the equivalent of making 120% each year. That’s more than doubling your money – while the S&P 500 averages an annual return of just 10.13%. (Remember, while the index has had banner years in 2023 and 2024, with total returns of 26,29% and 25.02% respectively, the average since 1957 is still meh.) Each trade wouldn’t even have to be very large. Our "Farmer's Almanac" for the Stock Market There are hundreds – if not thousands – more of these seasonality cycles waiting to be found out there, hidden in the data of countless different stocks. And my team has developed a new strategy to capitalize on them – built around a system that can track and chart the most optimal seasonality patterns of the year, like our own “Farmer’s Almanac” for the stock market. I’ll be hosting a webinar to go into more detail on this strategy on January 8 at 10 a.m. ET. Leading up to it, I’m making our seasonality tool available so you can check these historical patterns yourself. You can sign up to attend the webinar here– completely free – and after you sign up, make sure to try the tool for yourself. It’s revolutionary, even compared to the rest of TradeSmith’s suite of software and investment tools. And it has almost endless nuggets for us to mine… The Right Seasonality for Growing Profits Our historical research shows that Tesla and Broadcom jump each May. Advanced Micro Devices does great in November. Allient is a great buy in October… But NeuroMetrix is a bad idea in October. Finding these opportunities took a lot of searching. So, I dedicated our entire research and development team – 74 people in total – to the task of serving up these cycles automatically. The resulting algorithm runs 50,000 tests per day to analyze every single stock in the major indexes, find the ones with the strongest seasonality trends, and point us to the best opportunities – down to the day. As we backtested this strategy, we realized that trading these stocks at their very best times of year wasn’t just a novel approach – it was an incredibly effective one. Over our 18-year backtest, these seasonal trades delivered 857% in total growth. That’s more than twice what the S&P delivered over the same period. Even in 2007, the strategy’s worst year, it delivered an annualized return of 37.9% (the S&P 500 returned just 5.49% that same year). Itworked year after year, pointing you to the best times to trade each stock. Amazon is another great example… Finding the Best Seasonal Trades Between May 24 and July 13, 2024, Amazon has gone up every year for the last 15 years, with an average return of 10.26%. If you bought shares at market close on May 24, 2024 for $180.75 and sold them at the end of the period on July 12, you’d have banked 7.6% in profits. If you’d sold near the seasonal peak on July 5, you would have earned 10.65%. I could show you examples of these seasonal patterns all day long. We’ve uncovered seasonality cycles in stocks, indexes, even currencies and commodities. And we’re one of the few firms that can crunch enough data, the right way, to identify the very best seasonal trades. If we wanted to, we could easily launch a hedge fund of our own, built around this tool. But at TradeSmith, we’re not interested in that type of business. Instead, we’re offering regular investors and traders access to try this powerful software for themselves. Putting Power in Your Hands By helping you determine the best day of the year to buy a stock… and the best day to sell it – we’re giving you the chance to put the power of seasonality to work. Until Sunday, January 8, you canclick here to try our Trade Cycles seasonality tool – for free. I’ve got plenty more to share about the tool and our full Trade Cycles service in the coming days. Click here to save your spot now for our January 8 event at 10 a.m. Eastern, where I’ll go into even more detail. And make the most of that seasonality tool while it’s still free. Start off 2025 with a power injection into your investment strategies. All the best, |
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