You Have 10 Trading Days Left VIEW IN BROWSER By Michael Salvatore, Editor, TradeSmith Daily In This Digest: Don’t mess this up… Based on what I’m seeing in our data, greed will tempt you in powerful ways over the next 10 trading days. You will reach that moment we’ve all felt as traders. Those times where you feel unstoppable… where there’s no chance the market could turn… and where you’re inclined to add more risk rather than take it off. Do not fall prey to this. The next 10 trading days are an important time to be selectively long the market. It may prove to be one of the most profitable periods of the year… even including the late April recovery. But after those 10 days are through, you’ll want to consider taking profits… and maybe even putting on your bear cap and taking some trades to the downside. I’ll walk you through it in today’s Daily. I’ll explain why I’ll be strategically pruning risk from my portfolio towards the end of this month. And I’ll show you one great seasonality idea to trade from now until then. The data, as you’ll see, is virtually inarguable… and utterly invaluable. | Recommended Link | | | | Louis Navellier has uncovered a specific company that’s perfectly positioned for Trump’s reshoring agenda but flying under the radar. Based on his 40 years of experience finding stocks like Amazon and Nvidia early, this could be explosive. Click here to get the details. |  | | The next 10 days are a major tailwind for stocks… Look at the seasonality chart of the S&P 500 below. Right now, we are smack in the middle of a seasonal window where the S&P has gone up with a perfect track record over the last 15 years – specifically from June 28 to July 28: 
Historically, it’s returned 3.35% on average during that time. Annualized, that’s just over 49%. You can also see below just how monumental July can be for markets. Only five times over the last 15 years have returns been less than 2%. Sometimes they’re far more: 
As I write this, the S&P 500 is up 1.12% from the first trading day of the month. So far, we’re sticking to the script. We’re almost exactly halfway through the seasonal period now, and the S&P would need to run about 1.5% higher to almost perfectly match the average historical return: 
I’m not saying that’s exactly what will happen. Seasonality just gives us an edge on market conditions – it’s not a crystal ball. We could go even higher, or we could trade flat, or we could even turn negative. But thus far, the data points bullish. And the reason it’s so important to make the most of this short window is because of what has historically happened afterward. From the seasonal peak on July 28, stocks have been lower over the next three months more than half the time, with an average return of -1.81%: 
The yearly breakdown also shows us that years where stocks are up in this period (as they were in 2010, 2018, 2020, and 2024) have preceded down years like 2011, 2019, and even 2021: 
Could stocks be higher through this window again this year? Absolutely. Interestingly, the last back-to-back win streak during this window was from 2017 to 2018 – Trump’s first two years in the White House. But the plain fact is, the odds of losses are higher than the odds of a win… So, with all this in mind, we can come up with a simple trading plan to optimize the bullish seasonal forces at play. (Later this month, we’ll talk about some downside trades showing up in the seasonality data.) From now through July 28, the seasonal peak for the market’s guiding light, the S&P 500… you want to be in swing trades following the absolute best seasonal opportunities. TradeSmith’s software helps you easily spot these setups. For example, here’s a simple screen I ran across all the major market benchmarks (S&P 500, Nasdaq 100, Dow, S&P 400, and S&P 600) that shows stocks with an Optimal seasonality pattern beginning anytime in the next 10 days: 
If you’re a Trade Cycles or TradeSmith Platinum subscriber, you can save the screener settings and tweak them to your liking by clicking this link. So, pop in here and take a look at all of these various Optimal patterns – some of which extend well beyond the broad-based seasonality window for the S&P 500. Like I did in my screener, the seasonality tool uses the past 15 years of historical data to find what we call Optimal patterns, which are those where: - The accuracy rate is 80% or greater
- The average pattern return is 4% or greater
- And the annualized return is 20% or greater
Let’s zero in on the top of the pack, mid-cap Healthcare stock Revvity (RVTY). RVTY has an Optimal pattern beginning today, July 16. From today over the next 10 trading days, RVTY has historically gone up an average of 4.35%… and it’s done so 80% of the time. 
This is exactly the type of trade setup we want to see. We have broad-based seasonality in the major benchmarks. And we also have isolated, Optimal seasonality in a little-known smaller stock that will be highly favorable to investors in a risk-on wave. And just like in the benchmarks, we see a major downturn in RVTY starting at the beginning of August. I am seeing similar patterns everywhere right now. That’s why I’m so confident that these next 10 days will be a major swing to the upside. And as we get closer to the end of the month, I’ll start sharing some ideas we can use to take advantage of an August downswing. But we should talk about a potential catalyst for such an event… As we discussed Monday, stock prices don’t move around for no reason. For close to 200 years, economists and mathematicians have followed Efficient Markets Hypothesis (EMH), to propose that news and the immediate reactions to news by way of capital allocation, are what drive prices. When we have seasonality data, we can do more than simply speculate on prices. We know what to reasonably expect, price-wise, and can instead speculate on what news might trigger it. And this time around, the big catalyst is plainly obvious… On July 30, the Bureau of Economic Analysis is set release its official estimate of U.S. GDP for the second quarter. As I’m sure I don’t need to remind you, the second quarter was easily the biggest disruption to the U.S. and world economies – which, even in the era of de-globalization, do still feed off each other – since COVID. A strong GDP number could propel a wave of euphoria, culminating in a risk-off top. A poor number could issue a strong sell-the-news event. But whatever happens, it’s important to understand that the seasonal factors at play point to a decline. That can mean hot GDP or cold GDP – it does not matter. What matters is the price data. This is why I’ll be strategically trimming my biggest winners from my portfolio as we near the GDP data release on July 30. I’ll want to keep some exposure, to be sure. But I want to take some chips off in the event that a bad GDP print spooks the markets and brings the topic of recession back onto the table. And in the event GDP runs hot and the markets soar? That’s just another opportunity to pull more risk off. I’m sharing my plan with you so plainly because I believe it’s essential for all active investors to heed this warning. We’re about to enter a poor period of returns for stocks. Sitting on your hands right now is simply not the optimal move. Make hay while the sun shines these next 10 days. And then, make hay again on a cloudy day if the market turns. To prepare you for a return of volatility when the clock runs out on bullish seasonality, our CEO Keith Kaplan is holding a webinar on Tuesday, July 22 all about how to make “rapid fire” profits in an environment like that. When you register here to join him, you’ll get free access to our seasonality charts leading up to the webinar. That way, you can see what’s in store for your favorite stocks during this market inflection point… and maybe find some new trade ideas, too. To building wealth beyond measure, 
Michael Salvatore
Editor, TradeSmith Daily | 
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