Good morning, traders…
While you’re thinking about your Christmas shopping lists, I’m thinking about something most traders completely miss.
The market moves in seasons, just like the weather.
Certain months favor high-conviction swing trades. Others require more defensive positioning.
These patterns repeat year after year with remarkable consistency.
And now that December just started…
We’re entering one of the most predictable “Trading Seasons” of the year.
The data backs this up, going back decades.
But the key is knowing how to shift your strategy to exploit this once-a-year cycle.
Fighting seasonal patterns makes trading harder than it needs to be.
Trading with them puts the wind at your back.
That’s exactly why I’ve mapped out the five major market seasons (and how your approach should adapt to each one).
Understanding these shifts could be the difference between ending the year strong and watching your hard-earned gains drift back towards breakeven.
The Best Trading Season Just Started.
The Santa Claus Rally / The January Effect
The Santa Claus Rally (which leads into The January Effect) is one of the most reliable seasonal patterns in the market, covering the last 5 trading days of December and the first 2 trading days of January.
Four factors drive the rally:
- Window dressing, where fund managers buy strong performers to improve how their portfolios look on year-end statements.
- Holiday optimism drives sentiment while light volume creates less resistance to upward moves.
- Tax-loss harvesting wraps up, removing selling pressure.
- New-year positioning begins during this window.
Focus on momentum names with strong year-to-date performance during this window.
The AI Tollbooth Phenomenon
In 2026, Big Tech is on track to pay $900 billion in what insiders call “AI Tolls.”
While the media obsesses over ChatGPT and Google’s latest chatbot drama, there’s a much quieter story unfolding behind the scenes.
Microsoft, Google, Amazon, Meta. Practically every major AI player with a multi-billion-dollar budget is quietly sending their “toll money” to one single company.
And this month, the AI Tollbooth is starting to make collections.
Think of it like this: while mid-cap firms scramble to cash in on the AI gold rush, there’s one company collecting rent from all of them.
It’s the digital equivalent of owning the highway while everyone else pays to drive on it.
Tim Bohen believes this stock needs to be in your portfolio RIGHT NOW … before every retail trader (and their grandma) catches on.
But it won’t stay under the radar much longer.
If you act now, you can get it for just $1:
The Summer Doldrums
You’ve probably heard the classic Wall Street saying, “Sell in May and go away.”
That’s because of the Summer Doldrums.
The May through October period historically underperforms November through April. The summer months (June through August) bring the worst of it.
Volume thins out as traders take vacations, draining liquidity from the market.
Earnings gaps create quiet periods between reporting seasons, while news flow slows down significantly compared to the rest of the year.
While summer may be the most exciting time of the year for some, it’s usually kind of boring in the stock market.
That doesn’t mean there aren’t good setups. They’re just more spread out.
The September Effect
September is the only month on the calendar with a historically negative return in the stock market.
The average September return for the S&P 500 is -1.2%. The index has booked a red month 55% of the time since 1928.
This happens because funds rebalance after summer, trimming risk before Q4 as companies reset guidance for the upcoming year.
But here lies a good example of how these seasons don’t always play out in their conventional way.
This past September was resoundingly bullish. The Nasdaq surged more than 5%.
You can’t base your entire strategy on these seasons. They’re not a crystal ball. No one year is exactly like another.
How To Use Seasonal Patterns
Seasonal patterns shift probabilities without guaranteeing outcomes.
A Santa Claus Rally won’t lift every stock. The environment simply favors bullish positioning more than bearish positioning.
Summer doldrums won’t prevent you from making money. The strategies that work during this period require different timeframes and risk management.
You still need discipline. You still need stops. You still need confirmation.
But when you align your strategy with the seasonal pattern, you increase your odds of success … exponentially.
We’re entering the Santa Claus Rally period.
This is one of the most favorable seasonal windows of the year for Smart Money trading.
Light volume supports momentum while window dressing creates buying pressure in quality names.
Holiday optimism shifts sentiment positively across the market.
The seasonal rally has just begun. Use it.
Happy trading,
Ben Sturgill
*Past performance does not indicate future results
