Almanac Trader

June’s seasonal market patterns reveal an intriguing divergence between recent market behavior and longer-term historical patterns. The accompanying chart compares average June performance across major U.S. indexes during the last 31 years (1995–2025) against historical midterm-election years (1950–2022), highlighting a notable contrast in market tendencies.

Over the past three decades, June has generally been a constructive month for equities. NASDAQ stands out as the strongest performer, climbing steadily throughout most of the month and finishing with an average gain approaching 1.7%. Russell 2000 and Russell 1000 also show positive trajectories, ending June with gains of roughly 1.2% and 0.4%, respectively. Even the S&P 500 maintains a positive trend, DJIA remains near break-even but largely avoids significant weakness.

A key feature of the recent 31-year pattern appears to be resilience. After a modest pullback around the middle of the month, most indexes recover and strengthen into month-end. This suggests that investors may have historically used June weakness as a buying opportunity rather than a reason to reduce risk exposure.

The picture changes dramatically when examining midterm-election years. Across every major index, June has historically produced negative returns. Small-cap stocks have been particularly vulnerable. Russell 2000’s average performance deteriorates steadily throughout the month, ending around a 2% decline. Russell 1000 and NASDAQ also finish significantly lower, while S&P 500 and DJIA post meaningful losses as well.

This divergence reflects a broader market tendency surrounding U.S. midterm election cycles. Political uncertainty, shifting policy expectations, and heightened economic scrutiny often create a more cautious environment for investors. Historically, this has translated into weaker market performance during Q2 and Q3 of midterm years, with stronger seasonal tendencies often emerging later in Q4.

The stark contrast is difficult to ignore. Recent history suggests June has been a favorable month for stocks, particularly technology and growth-oriented sectors. However, the longer-term record of midterm-election years serves as a reminder that seasonal headwinds can emerge when political uncertainty increases.

NASDAQ just posted an exceptional month, gaining 8.36% in May 2026. That performance places May 2026 firmly in the top third of all May returns since 1971, joining years such as 1997, 2003, 2020, 2024, and 2025. When the NASDAQ finishes May in its strongest third of historical performances, the remainder of the year has generally been favorable.

Among the 19 completed years in the top third category:

– NASDAQ gained an average of 5.4% during the rest of the year. – Full-year returns averaged an impressive 19.1%. – Finished the year higher 84.2% of the time.

While June performance has been mixed, averaging just 1.2%, the larger takeaway is that strong May gains have historically been associated with positive trends extending well beyond the immediate weeks ahead. One reason this relationship may exist is that exceptionally strong May performance often reflects improving economic conditions, strengthening earnings expectations, and renewed investor confidence. In many cases, these forces do not disappear when the calendar flips to June.

Some of the strongest examples include:

1997: May gained 11.1%, followed by a 12.1% advance for the rest of the year. 2003: May gained 9.0%, and NASDAQ surged another 25.5% through year-end. 2020: May rose 6.8%, leading to a powerful 35.8% gain during the remainder of the year. 2024: A strong May was followed by another 15.4% advance through year-end.

Of course, history is not perfect. Years such as 1990 and 2008 remind that powerful rallies can still be interrupted by economic shocks, recessions, or financial crises. Strong momentum improves the odds, but it does not eliminate risk.

What It Could Mean for 2026

S&P 500 just accomplished something rare: nine consecutive weekly gains. This has occurred just 14 times (including the current streak) since 1930, making the current streak one of the strongest momentum signals seen in modern market history.

The latest streak began on March 27, 2026, and as of May 29, 2026, the S&P 500 advanced an impressive 19.0%. That gain is not only well above the historical average of 10.8% for prior nine-week winning streaks, but also the strongest rally recorded in the data set.

History suggests that markets frequently take a breather immediately after such powerful advances. The average return one week after a nine-week winning streak is –0.84%, while the median return is -0.91%. Only about 31% of occurrences saw the market continue higher during the following week.

The two-week outlook is more balanced, with an average return of –0.08%. In other words, short-term consolidation or mild pullbacks have been common after extended rallies.

While short-term returns are mixed, the longer-term data appears to paint a more constructive picture. Four weeks after the streak ended, the S&P 500 posted an average gain of 1.21%, with nearly 77% of instances showing positive returns. The median gain was 1.10%.

Looking out three months, the average gain rises to 3.48%, with the market higher in more than 61% of cases. Even more impressive, six months later the average gain expands to 5.48%, while nearly 77% of historical occurrences produced positive returns.

Several past examples generated substantial follow-through rallies. The streak ending in November 1985 was followed by a 22.7% gain over the next six months. The streak ending in December 2023 led to a nearly 15% advance during the subsequent six-month period.

According to the Stock Trader’s Almanac 2026 (page 90), the first trading day of June is the fourth weakest first trading day of all twelve months with DJIA gaining just 303.48 total points since 1998. Over the past 31 years, DJIA’s first trading day of June has produced gains 67.7% of the time with an average gain of 0.03% in all years. Sizable losses in 2002, 2011 and 2012 limit overall performance. S&P 500 has advanced 64.5% of the time. NASDAQ has been slightly weaker at 58.1%. Russell 2000 has also advanced 64.5% with the best average performance of 0.21%. 

June has favored NASDAQ over the last 55 years ranking sixth best with a 1.1% average gain, up 32 of 55 years (since 1971). This contributes to NASDAQ’s “Best Eight Months” which ends in June. However, June ranks near the bottom on the Dow Jones Industrials just above September since 1950 with an average loss of 0.1%. S&P 500 performs similarly poorly, ranking ninth, but with a 0.2% average gain. Small caps have tended to fare better in June. Russell 2000 has averaged 0.9% in the month since 1979, advancing 63.8% of the time.

However, in midterm years since 1950, June ranks no better than eleventh. June is the worst DJIA, S&P 500, NASDAQ, and Russell 1000 month in midterm years. Average losses range from 1.8% by Russell 1000 to 2.1% from S&P 500 and Russell 2000. All five indexes have declined more times than they have risen in midterm year Junes.

Kevin Warsh is officially the new Chairman of the Federal Reserve. The change in leadership at the Fed has dredged up latent fears over “the market always tests a new Fed chairman” and the curse of a new Fed chair. Much of the concern comes from relatively recent history, Ben Bernanke and the Financial crisis of 2007-2009, Alan Greenspan and the October 1987 market crash, and even Paul Volcker and the soaring inflation of the late 1970s. However, contrary to some research we have seen, a change in Fed leadership does not appear to be always result in imminent doom and economic gloom.

Drawdowns are a worst-case scenario and are generally one of the more bearish datapoints to present. To give you a general idea, the average S&P 500 drawdown in a calendar year going back to 1930 is 16.1%. The flip side of the worst drawdown would be the best rally, a bullish number. S&P 500 has averaged an impressive 25.9% best rally in a calendar year since 1930. Over the same 96-year span, S&P 500’s mean annual performance has been 8.0%.

In the accompanying table we present the S&P 500’s performance following a change in leadership at the Fed. Historically, performance is not all that bearish. Aside from the 3 months later interval, all other interval’s frequency of advance (% Higher) are above our standard 60% bullish threshold and average performance is positive.

The week after Memorial Day performed quite well from 1971 to 1995. DJIA & S&P 500 up 68% of the time, averaging 0.8% – DJIA up 12 in a row 1984-95. NASDAQ was up 72% of the time, average 0.6%, up 10 straight 1986-95. Since 1979 Russell 2000 was up 88.2% of the time, average 0.9%, up 13 straight 1983-95.

Starting in 1996 the week after Memorial Day performance diminished. DJIA was up only 43.3% of the time, average +0.07%, down 10 of last 16. S&P 500 and NASDAQ gained ground less than 57% of the time. Russell 2000 has been the most consistent since 1996, up 60% of the time with average and median gains of +0.85% and +0.76% respectively. Monstrous NASDAQ and Russell 2000 gains during the week in 2000 do skew the averages.

Friday before the long Memorial Day weekend can be a getaway day on The Street and trading can be lackluster with light volume. Dow has been up 12 times in the last 21 years with an average gain of just 0.05%. S&P has a modestly better record, with one additional advance and an average gain of 0.16%. NASDAQ has the best record on Friday, up 14 of 21 and averages a decent 0.38% gain. Russell 2000 has the fewest advances on Friday, but a still solid 0.30% gain.

Based upon average performance, Thursday has been the best overall day before Memorial Day with average gains ranging from 0.07% from DJIA to a respectable 0.34% by NASDAQ. However, based upon frequency of gains is Friday is better, except for Russell 2000. Coming into 2025, NASDAQ was up 9 straight Fridays. Wednesday has been the softest of the three days with DJIA and S&P 500 performance turning negative.

Over the years, May’s monthly options expiration (opex) week has been mixed. Since 1990, the last 36 years, DJIA and S&P 500 have both advanced 18 times and declined 18 times with average gains of 0.15% and 0.20% respectively. NASDAQ has been modestly bullish, up 20 times, down 16 with an average weekly gain of 0.42%.

With stocks popping on AI boom, Iran deal, and oil retreat news today, the Russell 2000 is up 16% since October intraday, leading the major indexes. NASDAQ is up ~8%, S&P ~7%, and DJIA ~5%. This is the heart of NASDAQ's and R2K's Best Eight Months — November through June.

The TACO Trade Trump Presidency Seasonal Cycle chart we've been tracking shows the spring bottom and subsequent rally right on track. We're not selling in May. We're holding NASDAQ and small caps through the Best Eight Months and letting the TACO Trade run.

When and if seasonal and midterm year weakness materializes, our MACD timing indicator will provide the signal to reposition — not Sell in May and go away. For now, technicals, earnings, macro trends, and the news cycle all point the same direction, and you don't fight the tape.

Lots of chatter this week on Sell in May. Worst Six Months May-October are historically worst in the midterm year — but Sell in May has been up 9 of the last 10 years and 2025 was the best. Much of the May-October and midterm year Q2-Q3 weakness was pulled forward to the Q1 Iran war correction.

The market has largely moved on and clearly expects a resolution over the next few months, if not sooner. With the conflict still unresolved, expect the market to mark time and move sideways through the 4-Year Cycle Weak Spot and Sell in May as the Mideast works toward a resolution with likely setbacks and midterm election year politicking ramps up.

Over the last 21 years, the first three days of May have historically traded higher, and the S&P 500 has been up 19 of the last 28 first trading days of May. Bouts of weakness often appear around or on the fourth, sixth/seventh/eighth, and after the twelfth trading day of the month while the last four trading days have generally enjoyed respectable gains on average, but the last day of May has weakened noticeably.

The first trading day of May has had a bullish history over the past 28 years. DJIA and S&P 500 averaged around 0.35% on the day, NASDAQ 0.42%. Russell 2000 has the best frequency record, up 20 of 28 years or 71.4% of the time since 1998, though its average gain of 0.23% trails the large caps.

NASDAQ bullishness has been fading recently — down 5 of the last 7 years. May 1's worst loss came in 2020: DJIA and S&P 500 shed over 2.5% while NASDAQ and Russell 2000 dropped over 3%. In 2022, NASDAQ and Russell 2000 both gained over 1%.

May marks the beginning of the “Worst Six Months” for the DJIA and S&P. To wit: “Sell in May and go away.” Our “Best Six Months Switching Strategy,” created in 1986, proves that there is merit to this old trader’s tale. A hypothetical $10,000 investment in DJIA compounded to a gain of $1,316,635 for November-April in 75 years compared to just $4,253 for May-October (STA 2026, page 54).

May has been a tricky month over the years, a well-deserved reputation the May 6, 2010 “flash crash” only reinforced. It used to be part of what we once called the “May/June disaster area.” From 1965 to 1984 the S&P 500 was down during May fifteen out of twenty times. Then from 1985 through 1997 May was the best month, gaining ground every single year (13 straight gains) on the S&P, up 3.3% on average with the DJIA falling once and NASDAQ suffering two losses.

In the years since 1997, May’s performance has been erratic; DJIA up sixteen times in the past twenty-eight years (five of the years had gains exceeding 3.9%). NASDAQ suffered five May losses in a row from 1998-2001, down –11.9% in 2000, followed by sixteen sizable gains of 2.5% or better and seven losses, the worst of which was 8.3% in 2010 followed by another substantial loss of 7.9% in 2019.

Since 1950, midterm-year Mays rank poorly, #8 DJIA, #9 S&P 500, #6 NASDAQ, #6 Russell 1000 and #7 Russell 2000. Performance ranges from a best of +0.1% by Russell 1000 to a worst of –1.0% for Russell 2000. With nineteen years of data, only DJIA and S&P 500 have recorded more positive midterm Mays than negative. Russell 2000 has been down in seven of the last eleven midterm Mays.

May 1 kicks off the Worst Six Months. The question this year: did the Iran-driven selloff already do the seasonal work?

The Trump Presidency Seasonal Cycle we’ve been tracking remains in play. Five Trump presidency years — 2017, 2018, 2019, 2020 and 2025 — share a signature. Turbulence early, a bottom in late March or early April, then a rally into year-end. We added those five years to our S&P 500 Midterm Election Year Seasonal Pattern chart. 2026 is tracking it closely.

S&P 500 bottomed March 30 at 6343.72, down 9.1% from the January 27 high and hit a new record today, up 12.9% in 25 days. NASDAQ is at a record up 19.4% from the low. DJIA is 1.9% off its February 10 all-time high. The December Low Indicator triggered in March and was recovered quickly — historically a green light when paired with a positive January Barometer.

Our Best Six Months Seasonal MACD Sell signal hasn't triggered, yet. The market will likely mark time through the 4-Year Cycle Weak Spot as the Iran conflict works toward resolution. Then the Q4 Sweet Spot. Our 2026 base case — 8-12% full-year gains — remains intact. If the conflict doesn't resolve and the Sell signal fires, we rotate.

I sat down with Steve Eisman — the legendary investor immortalized in The Big Short — for episode 56 of The Real Eisman Playbook, and it was one of the more enjoyable conversations I've had in a long time. Steve has a well-deserved reputation as a sharp, no-nonsense interviewer. What I didn't expect was how much fun it would be.

We covered a lot of ground: the most important recurring patterns in the Stock Trader's Almanac, which patterns have stopped working and why, the seasonal disappointment that has been Bitcoin in midterm years, and — the part I'll remember most — how human psychology ultimately drives all of it.

Steve Eisman Made My Case Better Than I Did

The moment I'll be replaying for a while came around the 15-minute mark. Steve pushed back the way any serious investor should: "Why does it recur? Maybe you don't know and it just does." Fair enough challenge. I started walking through the data points — the October 31st mutual fund and 40 Act fiscal year-end deadline, the quarterly window dressing cycle, the institutional mechanics that create the seasonal vortex.

Then Steve took over. And this is where it got good.

He described exactly what happens at quarter-end: an institution owns a stock that's down 50%. Maybe it's the right call to add to it. But they sell it anyway — out of embarrassment — because they don't want their investors to see it on the books when they report. "It's like it never existed," he said. That selling pressure, multiplied across thousands of funds, repeated at the end of every quarter but hitting hardest in September and October, is what creates the Worst Six Months. Then institutions scramble to make their numbers into year-end, money follows money, retail investors deploy bonuses and holiday optimism, and you get the Best Three Months — November, December, January.

His conclusion: "I'll grant you this one. After all, you have a scientist who said it works."

When one of Wall Street's great skeptics — a man who shorted the entire housing market — validates the institutional mechanics behind 60 years of seasonal patterns, that's not a small thing. That's the whole point.

Human Nature: The Architecture of Recurring Patterns

The reason these patterns recur isn't mystical. It's behavioral and structural. Think about the intraday trading day: weak open, late-morning rally, midday lull, post-lunch bounce, mid-afternoon trough around 2–2:30 as weary traders reach for coffee to make it to the close, then smart money rallies into the bell. That pattern repeats day after day, decade after decade, through every technological revolution in market structure. Algos didn't kill it — because humans programmed the algos, and humans are creatures of habit.

Zoom out and it's the same story at every level. People get paid on the same cycle, take vacation at the same time, celebrate the same holidays. Institutions report earnings quarterly, face triple witching four times a year, and operate on fiscal calendars that don't change. The Almanac has been documenting these rhythms since my father Yale Hirsch published the first edition in 1968. The vehicles change. The technology changes. Human behavior remains the same.

The 2026 Setup

We also covered the current market: the Trump Presidency Seasonal Cycle (Q1 Shock, Q2–Q4 Awe), the Iran conflict and its impact on equities and oil, the December Low Indicator trigger, and where the setup for the rest of 2026 stands. With the Iran ceasefire holding and the market erasing its war losses, the spring low thesis is looking increasingly on track. Base case remains 8–12% for the full year, with the Worst Six Months Weak Spot the next hurdle to navigate.

Episode 56 of The Real Eisman Playbook is live now. Watch it on YouTube here: https://youtu.be/2mLJLmvDFD4?si=JHoMCytlA0yzt2sx or listen wherever you get your podcasts.

Although NASDAQ’s daily winning streak has come to an end at 13, its outlook for the next month remains positive. During its 13-day winning streak, NASDAQ gained an impressive 17.67%. This was its best 13-day winning streak ever, besting its last streak that ended in January 1992. As impressive as 13 days of gains is, NASDAQ’s longest daily winning streak was 19 achieved in August 1979.

Looking back at NASDAQ’s five previous daily winning streaks of 13 or more days since 1971, we see average performance remaining positive during the 1-, 2-Weeks, and 1-Month periods after reaching 13 days. At the 1-Month after point, NASDAQ was higher 100% of the time with an average gain of 1.75%. Performance beyond 1-Month after does turn mixed in the limited data set, but the 1985 streak does stand out for being positive across all periods.