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We have entered the heart of earnings releases for the 3rd quarter, along with bullish seasonal market stock market trends. Of course, there are no guarantees with the stock market, but history is in our corner here. The probability is favorable that markets will move higher as volatility recedes through the end of the year.

Since 1928, the stock market has gained an average of 4.4% during the last quarter of the year – an astounding 83% of the time.

That is far and away the most positive historic data than for any other quarter of the year.

Why is this the best time of year for bullish seasonal stock market trends?

Two words: holiday shopping.

Holiday shopping kicks off on Black Friday and goes right through the New Year. Add onto that spending for holiday travel and holiday parties, and you have a recipe for high levels of consumer spending.

When consumers make money in the stock market (like this year), their increased wealth feeds the economy in a circular fashion (more money comes in, more money goes out).

Economic headwinds can roar in at any time, but when they appear during Q4, they are swiftly handled. An attention-grabbing headline or two might turn the markets upside down temporarily. The bulls typically hold onto the reins.

Why are seasonal patterns important?

Traders and investors are always looking for some sort of edge. If the calendar says to buy, then many will just step in there to buy. It’s not more complicated than that!

Take a look at the chart below, and you can see how strong seasonal stock market trends are for the last two months of the year. This is a 20-year performance average, which provides confidence that the pattern is going to hold.

Like I said above, this pattern is not a guarantee, just highly probable.

However, you can feel confident that when a bullish trend is established by now in the year, you have wind at your back.

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