🚨I’ll be live at 10 a.m. ET🚨
Stocks have surged after the midterms eight out of every 10 times, and Wednesday at 10 a.m. ET, we’re breaking down how to position for what could be the next Midterm Miracle [tap to join us]!
When I dug into the quarterly performance data for midterm election years, something jumped out at me immediately…
And it’s not what most traders expect.
We all know the fourth quarter is historically bullish, but what really matters is how significant this period becomes during a midterm cycle.
The contrast is striking.
The first, second and third quarters of midterm years tend to run flat or negative. September specifically averages a decline of about 1% during a midterm cycle. That isn’t a crystal ball — this year has been positive — but the pattern is clear enough to demand attention.
In today’s article, we’ll examine the seven-month stretch that has historically presented the strongest opportunity while considering both the bull and bear cases for positioning.
The Most Bullish 7-Month Stretch
October, November, December, January, February, March and April represent the best consecutive months to be invested in stocks during a midterm cycle. This isn’t a minor improvement. It’s a historically strong pattern that extends across the next 2 ½ quarters.
It has also been stronger than the typical March-through-May rally traders often watch. Sector performance heat maps show broad strength during this window, creating opportunities to identify the groups and stocks most likely to benefit.
The bull case is straightforward: Seasonal strength is approaching, Q4 quarter has historically delivered the strongest midterm returns and the Federal Reserve cycle we’ve been monitoring aligns with the same window.
When multiple cycles converge, they provide a stronger framework for timing and positioning.
Balancing Opportunity With Risk
The bear case still matters. Historical averages don’t guarantee future returns, and inflation, interest rates, earnings or unexpected policy developments can disrupt even a strong seasonal pattern. If price action fails to confirm the setup, traders should avoid treating the calendar as a reason to buy blindly.
That means watching for confirmation, sizing positions appropriately and identifying clear levels where the bullish thesis would weaken. Some sectors may show exceptional strength from October through December, while others may be better avoided entirely. The goal isn’t simply to be invested — it’s to be selective and manage risk.
We’ll explore these scenarios further in today’s roundtable session at 10 a.m. ET.
I’m also planning a deeper masterclass covering how to trade the midterm cycle, which sectors have historically performed best and my favorite stocks for this setup.
We’re nearing the end of the weaker seasonal period. The question isn’t whether the historical pattern exists — it does. The question is whether price action confirms it, and whether you’re prepared to take advantage without ignoring the risks.
Graham Lindman
Graham Lindman Trading
Follow along and join the conversation for real-time analysis, trade ideas, market insights and more!
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.Â
P.S. Have You Heard About the Midterm Miracle?
It’s a pattern where stocks surge after the midterms, regardless of who wins… eight out of every 10 times.
Join Nate Tucci, Graham Lindman, Roger Scott, myself and Emily Turner at 10 a.m. ET on Wednesday and you’ll find out how to take advantage of this pattern!
