After a relatively dismal two months for stocks, the market kicked off what has historically been its strongest period of the year today. In the post-WWII period, the S&P 500's average performance in Q4 had a gain of 4.1%, which is more than double the 2.0% average gains of Q1 and Q2 and ten times the average gain of Q3 (0.4%).

While Q4 has been positive for equities, the month of October has historically been volatile. Since 1945, the spread between the month's daily closing high and closing low has been 7.1%. While the average spread for every month except October fits within a 1.3 percentage point range of 4.7% to 6.0%, October is all alone at more than a full percentage point from the high end of that range.

With Q4 being the strongest quarter of the year and October being the most volatile month, they don't call October the month of market bottoms for nothing. In looking back at every market decline of at least 5% (without a rally of 5%+ in between), market lows have easily been the most prevalent in October. As shown in the chart below, 33 (14.4%) of the 'market lows' since 1945 have occurred in October, and the only two other months that account for even 10% of all market lows were March and September. Seasonality is on the side of the bulls heading into Q4, but that doesn't mean the road is smoothly paved.

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