The calendar has a memory

The S&P made a new high this week. That part is easy to see. The part worth paying attention to is what the market has done next, in the weeks after a new high, more often than not.

We pulled every year on record and measured the same stretch: from late September to the end of December. The same shape keeps showing up.

Seasonality, in plain terms, is that shape. It is the market's habit of doing the same thing at the same time of year. A tendency, not a law.

A quarter in two halves

The fourth quarter splits into two, and the two halves behave nothing alike.

From the end of September through most of October, the market drifts. Over the long run, that stretch has finished higher about half the time. A coin flip wearing a market's clothes.

From late October to the end of the year, the picture turns. That stretch is the strongest of the quarter, and it has finished higher far more often than it has not.

Midterm years pull the low forward

This is a midterm election year, and midterm years bring their own habit. In most of them, the low of the fourth quarter arrived in October. In several, that October low was the low of the whole year.

None of this makes October a promise. It makes it a tendency, and a tendency is not a law.

Where the tendency breaks

Seasonality is a probability, and probabilities have exceptions. There are years where the quarter closed lower anyway, and one where the market fell hard all the way into late December. A pattern that has held most years can still break in this one.

A quiet month, then the strong one

The calendar and the chart say the same thing. A quiet stretch first, a strong stretch after. That is the read. What you do with it is yours.