Cracking the Code of the Market's Seasonal Cycles
Editor's note: The market is always changing...
But that doesn't mean you can't find ways to secure consistent gains throughout the new year. In fact, Keith Kaplan – CEO of our corporate affiliate TradeSmith – believes we'll have plenty of windows for opportunity to see huge gains as we navigate 2026.
In today's Masters Series, Keith details how you can use historical data to identify these openings before they come to fruition...
Cracking the Code of the Market's Seasonal Cycles
Human progress didn't start with better tools. It started with better timing.
Early humans paid close attention to repeating patterns in nature – the length of days, the return of floods, and the timing of animal migrations.
Those observations gave rise to the first calendars – sometimes recorded in stone, and often anchored to the predictable cycles of the sun, moon, and stars.
This helped early farmers decide when to plant and harvest crops. And it helped hunters know when herds would pass through a region.
These cycles didn't explain why things happened. They explained when things happened. And that knowledge was enough to plan around.
And when it comes to humanity's long fascination with cycles, few monuments are as widely studied as Stonehenge in southern England.
Built about 4,500 years ago in several phases, Stonehenge is among the best-known prehistoric monuments.
One enduring theory about Stonehenge rests on its alignment. Its main axis points toward the sunrise on the summer solstice. That has led archaeologists to argue that Stonehenge was designed, at least in part, to mark key points in the solar year – signals that would have helped early societies anticipate seasonal change in a world where timing meant survival.
Building a monument like this likely required generations of careful observation, tracking the sun's annual path using little more than fixed landmarks and sightlines.
Today, we don't need to build huge stone structures to detect patterns that can help us thrive. We have more detailed data at our disposal and a lot more analytical power to help us put it all together.
At TradeSmith, our mission is to give everyday investors access to the kinds of data and analytics once reserved for hedge funds. That work has led us to uncover a feature of the market that's often overlooked: seasonality in stock movements.
You can't see these cycles with the naked eye. They only show up after you run decades of data through powerful algorithms to look for them.
But once you do, a surprising picture emerges...
Big-box retailer Target (TGT) provides a good example.
As one of America's largest retailers, this stock moves with the rhythms of consumer spending throughout the year. But for all the money won – and lost – on Target over the last few years, there's one certainty...
Between June 22 and July 21, you want to buy the retail bellwether. Target has moved up an average of 5.2% during that summer period, rising 100% of the time over the past 15 years...
That's 15 years of summertime price spikes, starting long before it fell under the pandemic-era spotlight. And in 2025, the pattern held true: Target rose 10.3% during its 29-day seasonally bullish window.
The chart you're seeing above is from one of the breakthrough innovations from TradeSmith's team of researchers, software engineers, and quant investors: our groundbreaking Trade Cycles Seasonality tool.
It's an easy-to-use tool that can take one of thousands of commonly traded stocks, analyze its movements, and point out its strongest seasonality trends – with starting periods narrowed down to the day.
Here's another example of a strong seasonality pattern, this time in Home Depot (HD)...
Over the last 15 years, between June 15 and July 27, Home Depot's share price has risen 93% of the time, with an average return of 4.7%.
And in 2025, the pattern held true again. It rose from $349.31 on June 16 to $372.69 on July 28 – a 6.7% gain in just over a month.
Target and Home Depot are just two examples among many others.
Our development team has fine-tuned this tool to uncover seasonality cycles in stocks, stock market indexes like the S&P 500 Index and the Nasdaq Composite Index, as well as in currencies and commodities.
By crunching the data, compiling the historical movements of thousands of different assets, and running 50,000 tests a day to analyze every stock in the major indexes, we've built a new system to help predict the biggest jumps on 5,000 stocks.
Over our 18-year back test, these seasonal trades delivered 857% in total growth. That's more than twice what the S&P 500 delivered over the same time frame.
Even in 2007, the worst year in our testing, we saw an average gain of 2.5% and an annualized return of 37.9%. That's close to four times the average annual gain of the S&P 500.
And as we start the new year, a new batch of these seasonal cycles is about to kick off...
And we'll be sharing unfiltered access to the Seasonality tool and the top seasonal recommendations this year as part of our Trade Cycles trading advisory.
Good investing,
Keith Kaplan
Editor's note: Keith is sharing a powerful trading strategy based on these bullish seasonality windows in his event next week... It's TradeSmith's biggest breakthrough in more than 20 years, and it could be the key to beating the market by more than double in 2026...
On Tuesday, January 20, at 10 a.m. Eastern time during his Prediction 2026 webinar, he'll show you how his seasonality tool can help you find the best time to buy and sell a stock – down to the day.
Go here now to register – and give TradeSmith's Seasonality tool a try, free of charge, before the big event.