The Best Day of the Month to Buy Any Stock VIEW IN BROWSER BY WILLIAM MCCANLESS, SENIOR ANALYST, TRADESMITH Hey there, everybody. We’ll be welcoming some new Platinum members next week, so the editorial team asked me to walk you through the newest feature that Platinum folks are currently beta-testing. I love it – I’m already the very first “super user,” since it’s right up my alley, which is seasonality trading. If you’re a Platinum member… or, if you have my Trade Cycles service, you’ll be getting this next… you can go to the Trade Cycles tab, then click Statistics to access it. And let me show you a recent trade I found there. One that just kept becoming more and more exciting the further I explore with these new Seasonality Statistics. First, I ran a screener Tuesday, Nov. 25, for stocks that were in a Valley on our Trade Cycles indicator. As one of my trader buddies once put it – a British guy I met at a pool party who turned out to be a multi-millionaire foreign exchange trader in London – “All stocks do is go up and down.” All you’ve got to do is spot the pattern, and that’s what Trade Cycles does. The next stop after coming out of a Valley is a Peak… so, when it’s in that Valley area, that’s a buy signal in Trade Cycles. I mentioned seasonality, too… and I applied a couple more filters for that: 
With this screener, I wanted TradeSmith to show me stocks that have historically gone up this time of year, at least 80% of the time. The seasonal patterns should start within the next five days, since I’m looking for a short-term swing trade. You don’t want just any old stock, though, so I set TradeSmith to just give me large-cap and mid-cap stocks. Plus, they had to be in an uptrend – and in the Short-Term TradeSmith Green Zone. So above was the list of bullish seasonality trades I got back from all those filters. The more I apply, the more selectively I can trade. I narrowed it down to a couple of options, one of which was IDEXX Labs (IDXX). That’s the one where we’ll dig into the seasonality. And it’s a lot deeper than, you know, “There’s gonna be a Santa Claus rally in the stock market.” This is very specific seasonality – for this stock. So right off the bat, TradeSmith gives us the next optimal window of time to trade this stock. We can see here that in 13 of the last 15 years, IDXX has gone up from Nov. 27 to Dec. 27 with an average return of 4.6%: 
But now we can get even more granular and even more in-depth. Next, I want to look at the new Seasonality Statistics for all years of IDXX’s history. And the first thing that we see over the last 34 years is the best and worst days of the week… Plus, I can see the best and worst months of the year, too. - The best day for getting into IDXX has been Wednesday.
- The worst day for getting in has been Monday.
- The best-performing month has been July.
- The worst-performing month has been June. That’s interesting because most of the time, stocks tend to be pretty weak in July.
Next, I like to take a quick glance at the yearly matrix. December’s almost here, and you can see that IDXX tends to do better than some of the other months of the year: 
Next up is the monthly, weekly and daily view – which I really like. Below you can see which months perform better or worse than the stock’s median monthly return. In December, IDXX has had slightly better performance: 
So we can check that box, too. Then within a specific month, Week 1 turns out to be the best time to own IDXX: 
You can do even better, though. You can buy on the best day of the week… and the best day of the month… in that stock’s history. So, again, over its whole 34-year history, IDXX performs the best on Wednesday. So, if you were going to get into this stock, Tuesday or Wednesday likely would be the best timing… 
Or, if you get in on Monday and the stock goes down – or doesn’t do much – you know it’s not because you made a mistake. It’s just to be expected on a Monday. Now the last one is Day of the Month… and I love this signal. IDXX’s best-performing day is actually the 29th, with an average return of 0.5%, whereas the median return is 0.04%. But really, the returns pick up at the end of the month: 
You can see there was a cluster mid-month, but then there’s a cluster of strong returns at month-end through the beginning of the next one. So, remember, we have an optimal bullish window on IDXX that started Thursday. It’s only a month long, until Dec. 27 – but some of the seasonal windows are 60 days long. If you have a stock like that instead, you can wait until the best day of the month comes along. That’s a lot more statistically clear than looking at a price chart and saying, “Eh, you know, maybe I’ll get a better price later.” And price analysis is really important – don’t get me wrong. I rely on it heavily. But with Seasonality Statistics like this on IDXX, you can say, “Not only is the price at this level, but if I buy on the 25th, that’s right before the best days of the month… right before a higher-than-normal month starts… and right before its best day of the week.” That just gives you more certainty – or, at the very least, gives you more of a reason. And I think that’s what’s really important. When someone asks you, “Why are you getting in on this day on this trade?” It always is a kind of a litmus test to be able to clearly articulate your idea: - Why you’re getting in on that day,
- Why you’re staying in it for that long,
- And why you’re getting out on this day.
It wouldn’t really be an answer to say, “Well, it looks like it’s going to go up,” or “It’s trading above its moving averages,” or “It’s oversold on its Relative Strength Index, but still in an uptrend.” Those are all valid signals… but you want to be able to say that, plus, historically, it has a higher than median return on Wednesday. The seasonality is 80% bullish but starts ramping up on the 26th, and December is one of the highest-performing months of the year. To be able to give those reasons… on top of price action… It means that you understand the trade idea more in-depth than you ever would without this data. So I hope you can see why I love this upcoming feature of Trade Cycles. I’m going to be using it every day in all my analysis that goes into that and my other service, The Seasonality Investor. Again, you get this right away when you upgrade to Platinum, which you’ll be able to do next week. Enjoy the rest of your Thanksgiving weekend in the meantime! William McCanless
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