Founder’s Note: JC Parets here.
Quantitative Analyst Grant Hawkridge burns the midnight oil for us, so to speak, monitoring overnight price action from his perch in Melbourne.
Grant breaks it down like no one can, and he has data-driven to share with us today.
Here’s Grant…
By Grant Hawkridge
Hey, it’s Grant here again.
Hope everyone had a great time celebrating the Fourth of July.
We don’t celebrate it here in Australia — no fireworks, no cookouts — so while you were grilling, I was digging into the numbers.
Seasonality Is Behavior
At the end of each month, I review upcoming seasonality to see what history might be telling us about the next few weeks.
Seasonality refers to the tendency for markets to behave in repeatable ways at certain times of the year, based on patterns tied to cycles, investor behavior, and fund flows.
Some months tend to be stronger than others, not because of magic, but because of repeatable investor behavior and positioning flows.
Why do we care?
Because seasonality is a simple, effective way to identify whether there’s a tailwind or headwind for buying stocks in the coming month.
It doesn’t predict the future, but it helps set expectations — especially when it aligns with the current trend direction or level of market participation.
You’ve probably heard the old phrase “Sell in May and go away.” It still gets tossed around every year.
But July defies the idea that May through October is a bearish zone.
July Is the Exception
The idea is simple: Media outlets often suggest reducing equity exposure in May and returning in November, to avoid the so-called “weak half” of the year (May through October), which has historically underperformed the “strong half” (November through April).
But does that still hold today?
The data, especially when it comes to July, says no.
July continues to be one of the best-performing months of the year.
Since 1950, July has delivered an average monthly gain of 1.27% for the S&P 500 — the fourth-best month of the year.
To understand how that strength plays out inside the month, we can turn to the heatmap of average daily performance:
This chart shows the average return for each trading day of the year going back to 1950. Each cell reflects the average gain or loss on that calendar day, with green shades for positive returns and red for negative ones.
July clearly stands out. It has one of the highest percentages of positive days, with 70% of July trading days finishing higher over the past 70 years. While the gains are spread throughout the month, there’s consistent strength from start to finish.
This lines up with the monthly view: solid average gains and a strong hit rate.
The Edge Is Getting Stronger
But it’s not just the long-term history that looks good — recent Julys have been even better.
The chart below compares the S&P 500’s average path during July over two time frames.
The green line tracks the average daily progress since 1950.
The red line tracks the average over just the last 10 years.
The takeaway is clear: Recent Julys have outperformed the historical average by a wide margin.
Over the last decade, the S&P 500 has gained an average of 3.3% in July, with 10 out of 10 years finishing positive.
Recent Julys haven’t just outperformed — they’ve done it with consistency from start to finish.
Put simply, the July edge hasn’t faded.
It’s strengthened.
The numbers speak for themselves.
“Sell in May” might still get airtime, but it’s not backed by current data, at least not when it comes to July.
At TrendLabs, we use this type of seasonality data as context, not gospel.
And when seasonal patterns align with bullish trend structures and broad participation, we treat that as a tailwind — not something to fade.
July isn’t a time to go away.
It’s a time to stay engaged.
Stay sharp,
Grant Hawkridge
Quantitative Analyst, TrendLabs