RJ Hamster
The Best and Worst Days of the Year to…
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For the uninitiated, seasonality is the study of past price action and probabilities as a factor for trading strategies.
According to Keith Kaplan – CEO of our corporate affiliate TradeSmith – this data can give you a blueprint for when each asset will move, how strong the move will be, and the likelihood that the move will match history.
In today’s Masters Series, Keith details how applying this information to your investment strategy can help you thrive in 2026…
The Best and Worst Days of the Year to Buy Any Stock
2026 started with a bang.
In the early hours of the morning on Saturday, January 3, U.S. special forces carried out a raid in Caracas to arrest Venezuelan President Nicolás Maduro.
Soon after, the White House floated the idea of taking control of Greenland from NATO ally Denmark – a move that, if pushed far enough, would test the foundations of the world’s largest military alliance.
And there’s plenty of drama back at home, too.
The Supreme Court is due to decide on the legality of tariffs, forcing companies across the economy to rethink supply chains and pricing.
And President Donald Trump is expected to name a new Federal Reserve chair – a choice that could shape interest rates and stock prices for years.
And that’s before you factor in the breakneck speed at which AI is advancing and the changes it’s bringing to society, whether we like it or not.
When the world feels unstable, it’s natural to assume markets must be unstable too – chaotic, unpredictable, and hostage to the next headline.
But this common assumption overlooks something important…
While the barrage of news headlines can seem scary, most systems move in cycles. There are steady, repeatable rhythms that persist even when, on the surface, these systems may look chaotic.
The natural world works this way. So does the stock market.
You can’t see these cycles with the naked eye. They only show up after you run decades of data and quintillions (billions of billions!) of data points through powerful algorithms.
But once you do, a surprising picture emerges.
Thousands of stocks have historically reliable windows – specific calendar days of each year – when they tend to rise and others when they tend to fall. That occurs through bull and bear markets, manias and panics, wars, pandemics, and more.
I’m proud to say that, at TradeSmith, we’ve built cutting-edge software to track those patterns. We’ve also created a rapid-fire trading strategy based on these signals that can pinpoint bullish seasonality windows on 5,000 stocks – to the day. In our back tests, the system’s trades have won with 83% accuracy.
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Once you start looking, you’ll find seasonal patterns everywhere.
Birds migrate on nearly the same schedule every year. Whales follow sea routes that line up with breeding seasons and feeding cycles tied to ocean temperatures. Even trees conserve energy and grow seasonally based on the length of days and shifts in temperature.
We see seasonality patterns in the economy, too.
Retail spending reliably spikes in December. Electricity demand rises each summer as air conditioners come on. Airline bookings surge ahead of holidays, then cool off in predictable lulls once peak travel passes.
Investor behavior follows a calendar, too.
Investors rebalance portfolios and harvest tax losses in December, then put money back to work in January. Mutual fund flows tend to increase early in the year as retirement contributions reset. And professional money managers adjust exposure before the end of each quarter to manage risk and reporting.
Human decisions shape markets. So it shouldn’t be surprising that stock prices show seasonal tendencies as well.
This may be news to most regular investors, but traders have known about these patterns for decades.
Commodity traders, for example, have long tracked planting and harvest cycles in crops like corn and wheat.
Energy traders watch seasonal demand shifts tied to winter heating and summer cooling.
The gold market has also shown recurring seasonal tendencies, often strengthening during certain parts of the year tied to jewelry demand, central bank buying, and annual festivals in India and China.
And stock investors have studied phenomena such as the “January effect” for decades. Even Wall Street’s old saying – “sell in May and go away” – comes from observed seasonal behavior, not theory.
The only thing that has changed is how precisely we can track these seasonal phenomena.
Today, we can discover these patterns across thousands of stocks, over decades of history, and measure them down to specific days – not just months or quarters.
That’s what my team and I set out to do at TradeSmith.
We built software to analyze more than 2 quintilliondata points across roughly 5,000 stocks, running millions of historical tests to answer a simple question:
Is there an optimal time of year to buy – and an optimal time to sell – each individual stock?
When we tested this approach over the past 18 years, the results were remarkably consistent.
A straightforward seasonality strategy produced a positive average return every single year in our study. The typical trade lasted about 18 days and generated an average gain of about 6% – modest in isolation, but meaningful when repeated.
More importantly, the strategy didn’t fall apart when markets did.
It held up during the 2008 financial crisis, the pandemic, and the 2022 sell-off. The exact dates shifted slightly, but the cycles themselves persisted.
One example still stands out.
In late January 2009, at the depths of the Great Recession, Netflix (NFLX) entered a seasonal “green zone” – our indicator that a move up is imminent. Historically, beginning around January 21, the stock has risen roughly 20% over the following 80 days about 93% of the time.
Even in 2009 – when fear dominated markets – Netflix followed the same pattern and moved higher.
We’ve seen the same behavior play out repeatedly in recent years.
- Take Intuit (INTU). In one seasonal window, the stock rose about 13% in just 15 days – a move that showed up consistently in historical testing.
- Or Blackstone (BX), which advanced roughly 7.6% over a 20-day seasonal window, even as broader market sentiment was shaky.
- Or Entegris (ENTG). During the 2022 bear market, the stock rose about 7% in a 43-day seasonal window – a period when many investors assumed nothing was safe.
What mattered in each case wasn’t the business or the backdrop. It was the time of year.
That doesn’t mean every year looks identical. The precise “best day” can shift as new data comes in, which is why our system updates regularly.
But the cycles themselves don’t disappear.
When we tested a simple approach – focusing only on historically bullish “green zones” and avoiding bearish “red zones” – we demonstrated that many of the market’s biggest short-term moves clustered tightly around these seasonal windows regardless of headlines.
Living in the third decade of the 21st century can often feel bamboozling.
We’re being constantly buffeted by geopolitical shifts, economic threats like inflation, and exponential technological change… especially AI.
You don’t need to predict the next geopolitical shock… Fed decision… or figure out the future of humanity… to invest well and grow your wealth… But you do need a way to understand when the odds are historically tilted in your favor – and when they aren’t.
That’s what makes seasonality so valuable.
Good investing,
Keith Kaplan
Editor’s note: Markets will always feel noisy. And 2026 is no exception… To get an edge, you need to know which signals to ignore – and which patterns have been there all along, hidden in the data.
That’s why Keith is hosting an online presentation to unveil an innovative financial breakthrough that aims to identify the biggest stock moves before they happen. Plus, he’ll share a free stock recommendation, so you can see how this works in real time – not just in back tests.
On Tuesday, January 20, at 10 a.m. Eastern time, he’ll walk you through how he uncovers patterns in stocks… why seasonality keeps working even when markets feel uncertain… and how you can use his software to spot hidden seasonality trends. Here’s the link to register for your spot…
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