Managing Editor’s Note: Today, we’re hearing from our contributing editor Mike Burnick in his weekly Thursday feature.
Mike has over 30 years in the investment and financial services industry – from operating as a stockbroker, trader, and research analyst, to running a mutual fund as a registered investment advisor and portfolio manager, to being Research Director for the Sovereign Society, specializing in global ETF and options investing.
And he’s been senior analyst at TradeSmith for three years, running Constant Cash Flow, Infinite Income Loop, and Inside TradeSmith.
Here’s Mike…
Avoid This and Buy That, According to Trade Cycles!
BY MIKE BURNICK, CONTRIBUTING EDITOR, MARKET MINUTE
Our Trade Cycles tools can help you spot recurring price patterns in the market, which gives you a big edge in timing your trades.
Seasonality analysis uses historical price data to highlight consistent seasonal trends that tend to recur frequently. This translates into high-probability buying (and selling) opportunities in market indexes and individual stocks at specific times of year.
It’s easy to spot these seasonal trends graphically with our Trade Cycles Annual Pattern charts.
Currently, there are several assets setting up for significant seasonal trend shifts, so let’s take a closer look at a few of them using our Trade Cycles tools.
First, let’s take a look at the iShares Russell 2000 Index ETF (IWM), which tracks small cap stocks.
Small caps have been red hot this year, with IWM up over 7% in 2026 vs. a gain of less than 1% in the large cap S&P 500 Index.
But as you can see from the Trade Cycles Annual Pattern chart above, a period of seasonal weakness for IWM began last Wednesday, February 18 and this potential downtrend extends through April 7.
Over the past 15 years, IWM has been up only 53% of the time, posting an average loss of nearly 4% during this time frame.
Plus, IWM seasonality has been consistently bad in recent years, down five out of the last six years, including a -20.5% decline last year during this same time period.
So, if you’ve been eyeing small caps outperformance, this could be a perfect opportunity to buy the dip over the next month.
Second, Gold has pulled back a bit recently and gold mining stocks tumbled, too. But gold mining stocks have been outperforming, up over 50% in the last three months alone, prior to the recent pullback.
Seasonality says this pullback is another potential buying opportunity.
According to the Trade Cycles chart above, the VanEck Gold Miners ETF (GDX) has a few weeks of seasonal weakness ahead.
But then a bullish seasonal pattern starts for GDX on March 9, which extends through April 14.
Overall, during this period GDX is up 80% of the time over the last 15 years, posting gains of +7.2% on average, which is an annualized return of +72.9%!
Bottom line: Keep in mind these seasonal patterns don’t always play out exactly every year. But our Trade Cycles tools can give you timely insights into whether to lean bullish or bearish depending on the seasonal trend. Right now, you may want to be wary of small cap stocks over the next month. But gold miners look poised to gain again in early March.
Good investing,
Mike Burnick
Contributing Editor, Market Minute