NASDAQ Average Year Seasonality: Your Ultimate Guide to Timing the Tech Market
As of today, NASDAQ Composite (NDAQ) is trading around 88.28, just off intraday highs near 89.07. The index is about 1.5% off its 52-week high (~90.00) and up roughly 16% year-to-date, trading in a well-defined uptrend.
Key levels to watch include resistance near 90.00–91.00, and support around 87.00–87.50 and a deeper zone at 85.00. Today’s candlestick shows a slight pullback within a broader bullish structure a potential bull flag in progress.
Contents
- Candlestick Chart Analysis
- Support and Resistance Levels
- Buy, Hold, or Sell Decision
- Why Seasonality Still Matters in 2025
- What Is Seasonality, Really?
- The Numbers: NASDAQ Average Monthly Returns (30-Year Historical)
- Seasonal Patterns by Quarter
- Biggest Red Flag:
- Why These Trends Exist: The Psychology and Money Flow
- January to April
- May to August
- September
- October to December
- Does Seasonality Still Work in Volatile Markets?
- Recent Case Studies
- 2023:
- 2020:
- How Smart Traders Use Seasonality
- Practical Use Cases:
- But Don’t Blindly Trust the Calendar
- Final Thoughts: Use Seasonality as a Compass, Not a GPS
- TL;DR – Key Takeaways
Candlestick Chart Analysis
NDAQ is in a strong uptrend, trading near recent highs after a sharp rally from mid‑April. The chart is forming a classic bull flag/pennant, with price tightening and volume contracting—distance from the pole (~6 points) matches the typical measured move above the 90–91 resistance.
Recent candlesticks include:
- A small-bodied red candle rejecting near resistance—could be a retest of the pivot.
- Previous green candles show higher lows, keeping structure intact.
- Volume has dropped in the flag, which is normal before a breakout.
Momentum indicators on higher timeframes (20/50 MA and RSI near 60–70) suggest bullish bias but caution nearing overbought territory. Traders should monitor for either a breakout above 90.50 with volume or a breakdown below 87 for a failed pattern.
Support and Resistance Levels
| Type | Price Level | Description |
|---|---|---|
| Resistance 1 | $90.50 | Flag top/bull trend pivot |
| Resistance 2 | $92.00 | April swing high |
| Resistance 3 | $94.00 | 52‑Week high |
| Resistance 4 | $95.50 | Gap fill zone |
| Support 1 | $87.50 | Flag bottom / daily demand |
| Support 2 | $85.00 | Key bounce level from May |
| Support 3 | $82.00 | Late April low |
| Support 4 | $80.00 | 52‑Week low |
Key breakout level is $90.50. Holding above $87.50 keeps the bull flag alive. A drop beneath $85.00 would invalidate bullish bias.
Buy, Hold, or Sell Decision
| Action | Trigger Condition | Reasoning |
|---|---|---|
| BUY | Close above $90.50 | Breakout volume confirms bull flag |
| HOLD | In range $87.50–90.50 | Structure intact, waiting for trigger |
| SELL | Break below $87.00 | Breakout fails; pattern invalidated |
Buy on a clear breakout with added volume. Hold if price remains in the flag—let it play out. Sell (or lighten) if it falls below $87, indicating a fakeout and risk of a deeper pullback to $85.
Why Seasonality Still Matters in 2025
If you’re an active trader or even a long-term investor, you’ve probably noticed it: the NASDAQ doesn’t move randomly throughout the year. Certain months consistently deliver stronger returns. Others… not so much.
We call this seasonality, and while it’s not gospel, it’s grounded in decades of data. It’s the kind of insight that doesn’t predict the future, but it shifts the odds in your favor—especially if you’re trading tech-heavy indices like the NASDAQ Composite or QQQ.
Let’s get this straight: Seasonality won’t make you rich overnight. But used correctly? It can help you avoid walking into a statistical buzzsaw (hello, September) and lean into months when the odds tilt bullish.
What Is Seasonality, Really?
At its core, seasonality is the idea that certain months or quarters tend to perform better (or worse) in the stock market, year after year.
We’re not saying there’s magic in April or doom in September—but when you zoom out over 20, 30, even 50 years of NASDAQ data, patterns emerge. These aren’t random. They’re driven by:
- Institutional behavior (quarterly rebalancing)
- Earnings seasons
- Fiscal calendars
- Tax harvesting cycles
- Retail investor psychology
- Macro-economic trends
In the NASDAQ’s case—being a growth-heavy, tech-dominated index—those patterns are even sharper than you’d find in the S&P 500 or Dow.
The Numbers: NASDAQ Average Monthly Returns (30-Year Historical)
| Month | Avg Return (%) | Historical Bias |
|---|---|---|
| January | +1.8% | Bullish (Fresh capital) |
| February | -0.1% | Neutral |
| March | +2.0% | Strong Pre-Earnings |
| April | +2.4% | Very Bullish |
| May | +0.6% | Slight Gains |
| June | -0.4% | Weak (Summer Doldrums) |
| July | +2.1% | Bounce-Back Month |
| August | -0.7% | Bearish (Low Volume) |
| September | -1.1% | Historically Weakest |
| October | +1.3% | Rebound Month |
| November | +2.5% | Seasonal Surge |
| December | +1.7% | “Santa Rally” Effect |
Data Source: Nasdaq Composite monthly returns, averaged over 30 years.
Seasonal Patterns by Quarter
| Quarter | Avg NASDAQ Return | Notes |
|---|---|---|
| Q1 (Jan–Mar) | +3.7% | Strong start to the year |
| Q2 (Apr–Jun) | +2.6% | Driven by April, dragged by June |
| Q3 (Jul–Sep) | +0.3% | Typically choppy and weak |
| Q4 (Oct–Dec) | +5.5% | Consistently strongest—earnings + holiday rally |
Biggest Red Flag:
September consistently shows negative average returns. It’s not a fluke. Since 1950, September has been the worst-performing month for major U.S. indices—including the NASDAQ.
Why These Trends Exist: The Psychology and Money Flow
So why does this happen? Let’s unpack the behavioral finance and institutional behavior that fuels these patterns:
January to April
- New year = new money. IRAs, 401(k)s, and bonuses flow into markets.
- Q4 earnings announcements typically arrive in Jan–Feb.
- April often sees post-tax season repositioning.
May to August
- “Sell in May and go away” has some truth—volumes drop as institutions go into summer mode.
- Less liquidity = more choppiness, especially in August.
September
- Portfolio managers begin to lock in YTD gains.
- Retail and institutions both reduce exposure before Q4 earnings.
- Historically high volatility, even without bad macro news.
October to December
- October often starts weak but ends strong (“bear trap” month).
- November sees capital rotation back into growth.
- December benefits from the “Santa Rally” and end-of-year optimism.
Does Seasonality Still Work in Volatile Markets?
Here’s where people get tripped up.
You might say, “Well yeah, but what about the Fed, inflation, elections, oil shocks… doesn’t that override everything?”
Fair question. The answer? Sometimes, yes. But seasonality still shows up more often than not.
Let’s look at a few real-world examples.
Recent Case Studies
2023:
- September: NASDAQ dropped -5.8% (classic seasonal slump)
- November: NASDAQ surged +9.1% (one of the strongest in decades)
- December: Modest rally into year-end
Even amid rate hike fears and AI bubble talk, the market still followed the script.
2020:
- COVID changed everything… but even then:
- April bounced back hard (+15%) after March’s crash
- November surged post-election
- December rallied with stimulus hopes
Seasonality bent but didn’t break.
How Smart Traders Use Seasonality
Let’s be real: no one is trading only based on month names.
But smart traders and money managers use seasonality as context—just like they use RSI, MACD, volume, and macro data.
Practical Use Cases:
Swing Traders:
- Look for long setups in March, April, July, November
- Avoid aggressive longs in late August–mid September
- Use trend confirmation (moving averages, volume) before pulling trigger
Long-Term Investors:
- Add to growth names on seasonal dips (especially late summer)
- Use strong Q4 months for portfolio rotation or rebalancing
Options Traders:
- Time bullish spreads around April, July, November
- Consider protective puts during late summer volatility
But Don’t Blindly Trust the Calendar
Let’s pause for a second: Just because November is “historically bullish” doesn’t mean it can’t crash.
Seasonality is an edge, not a rule.
Watch out for:
- Surprise Fed policy moves
- Big Tech earnings misses
- Geopolitical shocks
- Sector rotations out of growth
If the NASDAQ is flashing red due to macro reasons, don’t ignore it just because the calendar says “bullish month.”
Final Thoughts: Use Seasonality as a Compass, Not a GPS
Here’s the bottom line:
- NASDAQ average year seasonality is real.
- It gives you insight into when tailwinds are more likely.
- Used wisely, it helps with risk management and timing.
But don’t go in blind. Always stack seasonality with:
- Technical setups
- Earnings calendars
- Economic data
- Sentiment shifts
- Fed announcements
When everything aligns—including the calendar? That’s when you lean in.
TL;DR – Key Takeaways
- Best Months for NASDAQ: April, July, November, December
- Weakest: September (by far), followed by August
- Best Quarter: Q4 (Oct–Dec)
- How to Use: As a tool—never as a trading rule
- Big Risk: Ignoring macro conditions during seasonal setups
