The Best 40-Day Stretch for Stocks Starts Soon VIEW IN BROWSER By Michael Salvatore, Editor, TradeSmith Daily In This Digest: - A new bullish seasonal window starts on Wednesday
- This trade had only two down years in the past three decades
- The best sector to own for the coming bullish window
- Just two more days till we close the door on Super AI Portfolio
- Catch the replay of our launch event while there’s still time
It’s the best time of the year to buy stocks… This Wednesday, Oct. 22, is the last day before the most bullish seasonal period for stocks in 2025. Take a look at this seasonality chart of the S&P 500: Seasonality is the study of how markets, sectors, stocks, and even commodities move at certain times of year. And TradeSmith’s software makes it easy to isolate the periods when these assets outperform with great consistency. What’s coming this week is the perfect example. From Oct. 23 to Dec. 2, the S&P 500 has gone up each of the past 15 years. And it’s gone up 3.5% on average. Not only is this the biggest seasonal trend all year in terms of returns, but it’s also a fast one. The coming bullish window is shorter than the ones we saw in the first quarter of the year and in July. This slice of fall is just a great time to be in stocks. This trend has persisted even during bear markets, like in 2022, when the S&P 500 ran up more than 8% and marked the bottom of the downturn. Here are the returns we saw for this same window going back 15 years: 
Even if you take it back to the 2008 Great Financial Crisis, the last time the S&P 500 fell in this seasonal window, it only fell -0.1%. Before that, you have to roll back to 1994 when the S&P dropped -1.6%. | Recommended Link | | | | This company is the lifeblood of AI data centers, yet almost no one has caught up with the story. Their hardware is so essential that the data center industry uses enough of it to stretch around the world 8 times – in a single building! So, if you own Nvidia stock now, you might be well-served to sell those shares and check out this under-the-radar play instead. Or if you missed the boat on Nvidia, this is a rare second chance to target tremendous profit potential as AI data centers spring up in every corner of the world. Get my full take on this exciting play right here… |  | | This bullish window is an even bigger opportunity when you’re trading with AI… If you tuned in to the Super AI Trading Summit last Wednesday, you’ll know that our CEO, Keith Kaplan, has been talking about a big opportunity opening up on Oct. 22. This is why. The data shows that, just two days from now, we’re set to enter an extraordinarily bullish window for stocks. And by following the AI Super Portfolio, you can potentially do even better than the market in this time. I ran the numbers on how this system did in our backtests during the same seasonal window in previous years. Check out these highlights… - In 2020, it was up 20% versus a 6% gain for the S&P 500
- In 2022, it was up 12.5% versus 8.7% for the S&P 500
- And in 2024, the Super AI strategy jumped more than 50% in just 28 trading days versus a 4.4% gain for the S&P 500 – a more than 10x outperformance.
This is all the more impressive when you realize the Super AI Portfolio doesn’t use leverage, options, or any other complicated strategy. And you don’t need to be glued to your screen all day, either. It takes, at most, 10 minutes a week to manage this strategy. You simply hold a rotating basket of the top five stock positions our AI model recommends. You sell when the AI says it’s time to sell and redeploy the proceeds into the next position. And every six months, you rebalance the portfolio so each position has an equal weight. More than 9,000 people showed up to see us debut this new system last week. And with results like this, it’s easy to see why. The AI Super Portfolio is a culmination of everything TradeSmith has been working toward for the past several years. It’s a pure expression of our mission: to give you a shot at hedge fund-level results with a strategy anyone can use. As a reminder, in one recent study spanning five years, it returned an average annual return of 374%. And last year, the strategy returned 602%. You can still catch the replay of Keith’s launch event here. But be aware that it comes offline at midnight tomorrow. Here’s another seasonal trade for your radar… Broad-based seasonality is just the first step in creating a trading plan. We know that, during a window of time, there’s a tide set to lift the whole market ocean higher. But what’s even better to know is which types of stocks – or “boats” – will catch the biggest waves.. I ran a quick study on the major S&P 500 sector ETFs – covering things like energy, technology, real estate, utilities, and many more. Here’s how they’ve performed during the bullish seasonal window that starts this week… 
Turns out, the fall season doesn’t treat all sectors the same. For example, look at Discretionary stocks (XLY). Those have been up 14 of the last 15 years for an average gain – counting wins and losses – of 4.9%. That matches the performance of Industrials (XLI). On the other hand, Utilities (XLU) have fallen more than half the time during this window. On average, the sector trades flat. Energy, too, has been up just 53% of the time… though, on average, it trades up 2.2%. Of all these sectors, though, Financials (XLF) stands out the most. It’s up 80% of the time, and the average trade is 5.6%. That’s more than double the average return of the S&P 500 over the same span. So let’s look at the AI forecasts for one of the top Financials stocks… XLF itself has a benign Predictive Alpha Prime forecast right now. Our algorithm projects just a 0.7% move over the next 10 days, with a historical accuracy rating of just 60%: 
That’s not a bad trade. But we’re going to find the real juice in the individual stocks in the Financials sector. Looking through the XLF holdings, one stock’s Prime forecast stuck out to me – Robinhood (HOOD): 
Regular Daily readers will be familiar with low-cost brokerage app Robinhood. It’s up nearly 230% in 2025. It’s also down about 15% over the last couple of weeks. But on Friday’s close, our AI model saw solid short-term upside for the stock. From then until Oct. 28 – a little over a week – it forecast HOOD to gain about 4%. And in the past, these forecasts have been accurate, down to the cent, more than 76% of the time. As it turned out, HOOD ran up nearly 6% in early trading on Monday. That will add to HOOD’s historical accuracy tally. But let’s find another financials idea we can still act on. Take a look at this Predictive Alpha Prime projection for payments provider and bitcoin company Block (XYZ): 
While XYZ is up about 1% in early trading on Monday, Prime forecasts it will fall -3.23% by Nov. 13. And Prime’s forecasts for XYZ have been accurate more than 77% of the time in the past. That makes it an anomaly during an otherwise strong time for financials. And it’s a good opportunity to highlight the differences between these two views of the market. Seasonality is simply the history of price action. Predictive Alpha, meanwhile, is an expression of our Large Numbers Model (LNM) algorithm. It uses AI to guess the next likely number in a sequence in the same way ChatGPT, a Large Language Model, uses AI to guess the next likely letter. This algorithm has correctly called XYZ’s moves so well… not because it’s relying on seasonality, recent momentum, or any other factors humans can see with the naked eye. It’s crawling through countless technical datapoints to draw that conclusion. All that said, if you’re looking to buy XYZ, you might get a better opportunity in the near future. And if you’re looking for a relatively weak name to trade over the coming weeks, this is one to watch. The AI Super Portfolio goes offline at midnight tomorrow. Catch the replay here before that bullish seasonal window closes. To building wealth beyond measure, 
Michael Salvatore
Editor, TradeSmith Daily | 
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