July Is Historically Strong. What Comes Next Is the Problem.
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Editor’s Note: Every market moves to a rhythm.
Bull markets. Bear markets. Earnings seasons. Election years.
The headlines change. But often, the patterns don’t – something TradeSmith CEO Keith Kaplan has been researching closely.
Today’s guest essay from Keith examines one pattern most investors never think about: seasonality. Decades of historical data has led him to believe certain periods consistently tilt the odds in investors’ favor – and that one of those windows is about to close.
He unpacked that research yesterday during his free Breakthrough 2026 event, including how his team is using it to identify opportunities throughout the rest of the year.
Here’s the lowdown on their strategy.
For thousands of years, the appearance of Halley’s Comet was a bad omen. If you saw it streaking across the sky, it meant war, plague, or the death of a king was coming.
Then an English astronomer figured out it was something far more ordinary: a regular visitor, keeping to a schedule.
Edmund Halley saw the comet when it passed in 1682. And he started asking questions. Where had it come from? Had anyone seen it before? And was it following some kind of hidden pattern?
Years later, he found the answer buried in old sighting records: The same comet returned roughly every 76 years.
In 1705, it led him to predict that the comet would return 76 years after the last sighting – in 1758.
Halley died in 1742. So, he never got to find out if he was right. But in 1758, right on schedule, the comet came back. And it’s come back about every 76 years since. You may have seen it when it last passed through the sky in 1986. Its next appearance will be in 2061.
What Halley’s Comet Teaches Us About Market Cycles
My team and I have taken the same idea – that the future can be read in the past – and pointed it at the market. The result is our breakthrough Seasonality software.
It shows that stocks keep schedules of their own – calendar periods when they have tended to rise or fall, year after year.
They’re hard to spot unless you have decades of data and the right algorithms to crunch through it all. But once you find them, you can do something most investors can’t: hold a stock for its strongest stretch of the year, and stand aside before its weakest.
And right now, it shows that one of the most important windows in the entire market is about to end. It’s a bullish window for the S&P 500. And it closes next Thursday, July 23.
I covered it in detail at yesterday’s Breakthrough 2026 event, where I was joined by more than 16,000 viewers. I also introduced the next evolution of our Seasonality strategy.
Over our 18-year backtest, these seasonal trades delivered 857% in total growth. That’s more than twice what the S&P 500 delivered over the same time.
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:
So make sure to catch the replay here.
Today, I’ll show you how it’s combining with a much older four-year cycle to raise the odds of a rough second half – and what you can do about it.
A market like that is a slow grind for buy-and-hold investors – months of going nowhere. But the same swings that punish them can work in your favor, if you know which days to trade around.
The S&P 500’s Bullish Seasonal Window Is About to Close
We call these calendar windows green days – and history shows they’re usually great times to invest.
The chart below shows the seasonality patterns for the S&P 500. As you can see, it’s been sitting inside one of these windows for weeks – a stretch of the calendar it’s climbed every year for the past 15 years.
But every stretch of green days has its end. And this one’s almost over.
We don’t always know why these seasonal windows appear. We only know that they do – and how reliably they’ve done so in the past.
But the end of this window will coincide with quarterly earnings reports from some of the most widely followed stocks in the world – Tesla, Amazon, Apple, Microsoft. And expectations are set so high right now that a company can beat its numbers and still get punished.
Last fall, AI darling Palantir did exactly that – it topped estimates and still fell almost 8% in a day, dragging the market down with it.
An expiring bullish window happening at the same time as a slew of sensitive earnings reports is enough to make me pay attention. But there’s also a second bearish calendar pattern at work – one that runs far deeper than any single earnings season.
It’s called the Presidential Cycle. It goes back to all the way to 1933. And it raises the chances of a downturn significantly.
The Presidential Cycle Adds a Midterm-Year Warning
A market historian named Yale Hirsch spotted it in the 1960s, working much the way Halley did – digging through decades of past data until a rhythm emerged.
Stocks, he found, tend to move in step with the four-year political calendar. And the second year of a president’s term – around the turbulent midterms – has typically been a rough one.
About 70% of U.S. bear markets have begun in the first or second year of a president’s term. And 2026 is a second year.
We saw this play out during the last two administrations. In the second year of President Biden’s term, the S&P 500 plunged 18%. And there was a 4% drop in the second year of President Trump’s first term.
That’s why I went public with yesterday’s event. I want to get this onto as many radars as possible. These historical patterns don’t guarantee stocks will roll over next week right on cue. But they’re serious enough that I’d rather you hear it from me now than find out the hard way in a few months.
This way, there’s plenty of time to prepare.
How to Trade Around the Seasonal Shift
A more volatile market isn’t only a threat. It’s also opportunity. In the kind of year I think is ahead, the swings that punish everyone else become the openings you can trade around. And green days help there, too.
Our system tracks 5,000 stocks and pinpoints the green days forming across all of them – the windows when a stock has historically tended to climb.
In our backtesting, a model portfolio built on this system turned every $10,000 into $85,700 – beating the S&P 500 by an average of 99%, through the longest bull market on record and the biggest selloffs alike.
You don’t have to go looking for them. Each month, we hand you a short list of the strongest setups we can find, timed to the calendar.
So don’t just wait to see how the volatility plays out. Watch Breakthrough 2026. You’ll see how we find these windows, why they hold up even when the market doesn’t, and what the close of this one could mean for the rest of your year.
