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Bulkowski's Seasonality

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As of 04/23/2019
  Industrials: 26,656 +145.34 +0.5%  
  Transports: 11,003 +26.03 +0.2%  
  Utilities: 773 +1.99 +0.3%  
  Nasdaq: 8,121 +105.55 +1.3%  
  S&P 500: 2,934 +25.71 +0.9%  
YTD
 +14.3%  
 +20.0%  
 +8.4%  
 +22.4%  
 +17.0%  
  Tom's Targets    Overview: 04/12/2019  
  Up arrow26,900 or 25,500 by 05/01/2019
  Up arrow11,200 or 10,500 by 05/01/2019
  Up arrow825 or 755 by 05/01/2019
  Up arrow8,250 or 7,850 by 05/15/2019
  Up arrow2,975 or 2,800 by 05/01/2019
As of 04/23/2019
  Industrials: 26,656 +145.34 +0.5%  
  Transports: 11,003 +26.03 +0.2%  
  Utilities: 773 +1.99 +0.3%  
  Nasdaq: 8,121 +105.55 +1.3%  
  S&P 500: 2,934 +25.71 +0.9%  
YTD
 +14.3%  
 +20.0%  
 +8.4%  
 +22.4%  
 +17.0%  
  Tom's Targets    Overview: 04/12/2019  
  Up arrow26,900 or 25,500 by 05/01/2019
  Up arrow11,200 or 10,500 by 05/01/2019
  Up arrow825 or 755 by 05/01/2019
  Up arrow8,250 or 7,850 by 05/15/2019
  Up arrow2,975 or 2,800 by 05/01/2019

Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.

What are the best months to buy or sell a stock? Instead of relying on the adage, "Sell in May and go away," I decided to find out using actual trades, not using hypothetical trades in the S&P 500.

 

Seasonality Summary

I found that the best time to buy a stock was from August to December and the best time to sell stretched from January to May. The best individual month to buy was September and to sell was March.

The results are based on actual trades, not hypothetical ones made in the S&P 500 or other index. Your trading results may differ from mine, so be sure to check yours. By deciding when to remain out of the market or trade fewer shares/contracts and when to jump in with both feet, you might make more money.

Seasonality: Buy Details

I have a spreadsheet that shows details of every trade I made since I started trading. Thus, it's easy to mine the data to find relationships. Sorting the data by the buy date and then using the median of the profits and losses gives the answer to the best months to buy.

Instead of listing the actual median value of my trades, I started with a hypothetical $10,000 in January and each month is a fraction/multiple of that based on a comparison of January to the other months. For example, if the median trade made $500 in January and $1,000 in February, instead of telling you the $500 and $1,000 amounts, I set the January gain to an arbitrary $10,000, thus making the February gain $20,000 (because February made twice as much as January). This is just a pathetic way of protecting my privacy.

In the following table, the median buy for January showed a loss so that's why I use ($10,000) instead of $10,000.

January: ($10,000)
February: ($10,191)
March: $21,108
April: ($385)
May: ($14,955) (the worst month to buy)
June: ($11,328)
July: ($7,412)
August: $2,321
September: $21,413 (the best month to buy)
October: $10,395
November: ($8,466)
December: $10,231

As the above results show, March is a strong month to buy stocks as is September. Since September is surrounded by positive months, I would favor it as the buy month. You want to avoid buying from January to July, and instead concentrate on buying from August to December.

Seasonality: Sell Details

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Below are the results for the sell side. The best time to sell is during March. The best period to sell is from January to May while avoiding selling (or being in the market) from June to December.

January: $10,000
February: $7,641
March: $17,322 (the best month to sell)
April: $2,874
May: $9,345
June: ($4,077)
July: ($7,357)
August: ($11,748) (the worst month to sell)
September: ($598)
October: ($6,649)
November: $2,078
December: ($10,328)

Seasonality: Calendar Combinations

Looking at the combinations of months we find the following.

The worst time to buy is the period from January to July. If the average gain from that period is set at $10,000, how much can we make by trading the remainder of the year (that is, buying from August to December, the best time to buy). Answer: $42,396. In other words, the average trade during August to December made over three times (not four times because we started with $10k) as much money as the January to July period. I use the average trade here instead of the median because the median had negative numbers but the average did not.

The worst time to sell is between June to December. If the gain from that period is set at $10,000, how much can we make by selling during the best time of the year, from January to May? Answer: $46,192. In other words, the average trade in which I sold during January to May made over three times as much money as the average trade from June to December.

Next, I combined the best buy and sell periods but did the opposite (sold during the best buy months and bought during the best sell months) and then set the average to $10,000. How much better would I have done if I bought during the best buy period and sold during the best selling period? Answer: $29,714. In other words, I almost doubled my money if I bought between August to December and sold from January to May when compared to trading during the other months.

-- Thomas Bulkowski. Donate now to keep this website free.

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See Also

  • Confirmation. How often does buying before confirmation work?
  • Yes, you can improve trading results by buying before confirmation. Here's how.
  • Failures. Which months show the most failures?
  • Best buy days. Which day of the week is the best one to buy or sell?
  • Best buy months. Can buying at the end of the worst performing month and selling at the best performing be profitable?
  • Best buy price. The best buy price is $20 or below.
  • Holidays. Does the market rise or fall before and after holidays?
  • Failure rates. Chart patterns fail more often than before.

Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners. Keep on working. Millions on welfare depend on you!