Monthly Bias Map
The NASDAQ 100 (NQ=F) displays distinct monthly seasonality patterns that traders can consider as probabilistic priors. Over the past 20 years, the index has shown a tendency to perform well in July with an average return of +3.45% and an impressive 85% win-rate. Conversely, September tends to be weaker, averaging a -0.19% return despite a 60% win-rate. These patterns suggest underlying factors such as institutional rebalancing, earnings announcements, and macroeconomic shifts that influence market behavior.
Best and Worst Months
July: The Best Performer
July stands out as the strongest month for the NASDAQ 100, with an average return of +3.45% and a win-rate of 85%. This robust performance can be attributed to mid-year corporate earnings reports, which often provide positive surprises and drive investor sentiment. Additionally, the summer months typically experience lower volatility, allowing for more sustained upward price movements.
September: The Underperformer
September, on the other hand, tends to be less favorable for the NASDAQ 100, with an average return of -0.19% and a 60% win-rate. This month is often characterized by increased volatility as traders return from summer vacations and reassess their portfolios. The transition into the final quarter of the year also prompts strategic rebalancing, which can lead to temporary market sell-offs.
Day-of-Week Tilts
When examining day-of-week patterns, Monday emerges as the strongest day for the NASDAQ 100, with an average return of +0.204% and a 61% win-rate. This may reflect the 'weekend effect,' where traders digest news and position themselves at the start of the week. Conversely, Thursdays exhibit a negative tilt, averaging -0.208% with a 45% win-rate, potentially due to traders locking in profits before the weekend.
Where Seasonality Breaks
Seasonal patterns are not infallible and can be disrupted by macroeconomic shocks or shifts in volatility regimes. For example, unexpected geopolitical events, significant changes in monetary policy, or abrupt economic data releases can negate historical trends. Additionally, structural changes in market composition or trading behaviors can alter these patterns over time.
Where This Fits
Understanding seasonal patterns in the NASDAQ 100 provides traders with a probabilistic framework to enhance their decision-making. However, these patterns should be integrated with other analytical tools and market insights. For a comprehensive view of current market conditions and further analysis, visit our NASDAQ 100 live dashboard, where this seasonality insight is one of many factors to consider.