ChartBrief 83 - An average year for the S&P500
- Callum Thomas
- Jun 12, 2017
- 2 min read
Seasonality is something that matters in markets, economics, and life! Most people have heard of the term "sell in May" (and the rest of the saying implies you should come back in October), and the stats tend to back that up - on average. Seasonality can help with market timing calls, but my view is that it should be a contributing factor; an additional piece of context, rather than the core thesis. With that all said, let's take a quick look at seasonality for the S&P500.
In this analysis I've taken a look not just at seasonality in price (based on average daily percentage change by business day of the year), but also at seasonality in the VIX or CBOE Volatility Index. This 2 dimensional view gives you an appreciation for seasonality in both risk and return - which are 2 sides of the same coin, and equally important factors in portfolio construction. The bottom line is that as seasonality turns negative for price from around June-July, it turns positive (higher volatility) for the VIX from around June. So whether it's price or volatility - the next quarter is historically typically more volatile and negatively biased return-wise.
The chart below shows an average year in the life of the S&P500 both on price and the level of the VIX. From July price sees negative seasonality, and the VIX sees positive seasonality.
Looking at the S&P500 trading through 2017 vs the historical average pattern, it's lining up fairly closely, and the implication is that on seasonality alone, markets may become more choppy in the coming weeks and months, with an elevated risk of a correction.
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The explanation of how the VIX behaves during different months really clarifies why risk management is crucial. It reminds me that keeping an eye on indicators is everything. For a fun, analytical challenge in a different domain, Baseball Bros lets you think strategically while managing team dynamics and plays.
Highlighting historical patterns in both price and volatility is key for making smarter, evidence-based decisions. It’s all about combining data points effectively. If you enjoy fast reactions and timing challenges, FNF Online is a fun way to practice rhythm and precision under pressure, which can surprisingly train focus skills useful in finance.
Seasonality insights like these are a reminder that market timing is all about context, not exact predictions. It’s fascinating how trends repeat but with subtle variations. If you like testing your reflexes and tactical thinking, Football Bros offers an entertaining and surprisingly strategic gaming experience that keeps you sharp.
I appreciate the dual focus on price and VIX seasonality—it really highlights the risk-return tradeoff that’s often overlooked. It reminds me that analyzing patterns carefully can make a huge difference. For a lighter kind of pattern practice, 2048 Cupcakes is a surprisingly addictive way to sharpen strategic thinking while having fun.
Great ChartBrief 83. I liked the clear take on S&P500 seasonality and the sell in May point. It was helpful that you said seasonality should be an extra piece of context, not the main reason to trade. Looking forward to the seasonality charts.