Chart of the Week - Changing Seasons

The seasons are changing, but in ways you might not expect, and this is a good opportunity to think deeper on seasonality AND strategy...

Sep 05, 2025

You can almost feel it in the air — the seasons are starting to change.

And I don’t just mean the weather.

Although you might say this week’s chart *is* about the weather (of markets!)

We’re talking seasonal price patterns… but before you hit delete on this, please note: today’s chart does offer a truly different perspective on things.

I’m sure by now you’ve seen dozens of stockmarket seasonality charts (including from myself over at the Weekly ChartStorm!) — but I’m here today to tell you about how pervasive seasonal trends are across asset classes, and how there’s a bit more to using seasonality signals than you might think...

Long story short, we see a clear tendency for: downside in risk assets, increased volatility, and upside in defensive assets right around this time of the year.

That means, if we knew nothing else, and there was no other information… all-else-equal over the Sep/Oct period you would want to have a preference for defensive assets and a bearish bias on risk assets.

That’s the short story.

But let’s consider some nuance on this.

Firstly, what even is seasonality? >> It’s very simply an average of price movements across the calendar year, over a period of history (most often calculated using the maximum/longest available historical data).

In that sense it is a statistical description of what happened in the past (clue 1) —on average (clue 2).

There’s a couple of reasons for care and thoughtfulness here: the first clue is that it’s about what happened in the past… and we can look at the past, learn from the past, try draw inference from the past: but today’s history is still being written. Things can change.

The other thing is, we’re dealing with averages here, and averages contain outliers, but also if it is actually close to normally distributed then we know that about half of the time the experience was better and half the time it was worse than the average.

What does this mean?

It means, understand and be aware of seasonal tendencies, but don’t rely on them… AND — Know how to incorporate them into a coherent process.

I always say you should look at seasonality from 2 specific angles:

1. Prompting Information: as a prompt to look closer (e.g. right now we would be paying particular attention to anything that confirms the seasonal trend such as worsening macro data, technical risk flags, value/sentiment extremes) — in other words, if the seasonality says watch out for downside risks, then you’d pay more attention to risk management and look for warning signs and bearish setups; or

2. Confirming Information: as a piece of confirming or conviction building evidence upon an existing and sound thesis (e.g. if you were already tactically bearish on risk assets or bullish on defensive assets, you would be looking at today’s chart as something to build on that existing case and maybe raise your conviction —and thereby lower threshold to action or increase sizing).

So in that sense by thinking it through a little further we can actually dig into some of the most fundamental principles of market analysis and investment strategy. So it’s a whole lot more than just fun with charts and stats.

Ultimately though, I think if I managed to make you ponder on process and strategy today (as well as the actual chart), then I can probably count this as a decent post.

Key point: Seasonal crosswinds are coming to a head across asset classes.

Bonus Chart 1 — Stockmarket Seasonality Map

For completeness, here’s the stockmarket seasonality map I mentioned.

As you can see, it’s around this time of year that price tends to be more ranging and volatile with a tendency for downside in stocks and chance of volatility spikes.

But also — let’s not forget about the good old YER [Year-End Rally]. As far as upside opportunities go, maybe the best thing that could happen would be a nice healthy seasonal correction to setup for a YER to close out what has already been an eventful year…

Bonus Chart 2 — Pressure Points

Now to lean a little further into the bearish side and examine the “what could go wrong?“ aspect (and p.s. I also like to ask and challenge people to think of the opposite question: “what could go right?“ …you always see people dooming it up for engagement on social media with the first question, but rarely the second).

The key thing that could go wrong, and not just tactically/short-term, would be that we get a typical seasonal spike in volatility and significant sell-off in risk assets… arising at a time when US assets are collectively still trading near record highs (and higher than both the dot com bubble peak + subprime credit boom peaks).

There are very clear pressure points that could get triggered off if the right (wrong) combination of things were to happen.

I’m not trying to call a bubble top or peak or anything, but I think we need to be conscious of these critical background features and realities of today’s markets — both on a larger long-term cycles standpoint, and in the more immediate tactical seasonal swings aspect.

It’s about pragmatism.

p.s. Reminder to subscribe if you haven’t already (n.b. you can sign up for the free Chart of the Week — or get weekly + monthly global macro/asset allocation ideas and insights with the premium service)

Topics covered in our latest Weekly Insights Report

Aside from the chart above, we looked at several other charts, and dug into some very timely global macro & asset allocation issues in our latest entry-level service weekly report:

Defensives: tactical update on defensive stocks
Property: as look at risks and forces shaping housing market.
REITs: reviewing the outlook for US/global REITs.
Japan: the big changes underway in Japanese equities.
US Small Caps: documenting the unique setup in smalls.
Global Banks: a big breakout and some big value discounts.

Subscribe now to get instant access to the report so you can check out the details around these themes + gain access to the full archive of reports + flow of ideas.

For more details on the service check out the following resources:

Getting Started (how to make the most of your subscription)
Reviews (what paid subscribers say about the service)
About (key features and benefits of the service)

But if you have any other questions definitely get in touch.

And if you would like a greater level of depth and detail + access, check out our Institutional Service for the full reports: Topdown Charts Professional

Thanks for your interest. Feedback and thoughts welcome.

Sincerely,
Callum Thomas
Head of Research and Founder at Topdown Charts

Follow me on Twitter
Connect on LinkedIn

NEW: Services by Topdown Charts

Topdown Charts Professional —[institutional service]
Topdown Charts Entry-Level Service —[entry-level version]
Weekly S&P 500 ChartStorm —[US Equities in focus]
Monthly Gold Market Pack —[Gold charts]
Australian Market Valuation Book —[Aussie markets]

Topdown Charts