September warnings fell on deaf ears in 2025.
You heard it everywhere, even from me.
It’s worth preparing for a downside when August and September are known for lousy returns and the market blues.
Back to 1990, the S&P 500 averages negative returns, yet this September, stocks clocked a monster +3.5% gain…its best in 15 years!
Today, we’ll be diving into this bullish outlier event in this week’s signal study. That’s what we did last year – and it signaled strong returns in the months ahead.
Turns out, big Septembers often kickoff blistering Q4 returns, as we’ll soon see. We’re in a full-fledged bull market… that’s going higher.
I’ll show you exactly what history suggests is in store – then provide a stock that’s ready for a 13% lift in the months ahead.
S&P 500 Caps Off Best September in 15 Years
2025 continues to defy all odds.
The tariff meltdown in April evaporated and kick-started one of the fastest recoveries ever.
Not a government shutdown or the historically weak month of September can slow down this bull.
That’s incredible, considering that Septembers are notably nasty with 2020-2023 logging 4 straight years of pain. By gaining 3.5% this time around, the S&P had its best September since 2010:
2024 saw a strong gain, too, though: 2%.
Today we’ll do a similar study to the one we did then, but we’ll study periods when the S&P 500 gained 3% or more, like they have this year.
Below shows how 2025, 2013, and 2010 all saw September gains of 3%+:
To show you how rare it is to have super strong Septembers: Since 1990, there were only eight times stocks gained 3% or more that month.
Then, the months of October to December are one of the best quarters to own equities. That period has averaged a market-beating return of 4.91% since 1990.
But here’s why we can be in for even more upside in 2025…
Whenever the S&P 500 gains at least 3% in the month of September, the fourth quarter averages a whopping 7.63% instead.
For those keeping score, that’s 55% outperformance:
Now, that’s an average, and roughly 500 stocks are involved. What about all the ones that didn’t gain 7.6% in the fourth quarter?
Well, all in all, this tells us two powerful things:
First, don’t jump off the bull yet…
Second, though, you’ve got to focus on great companies that’ll thrive with this tailwind.
Fortunately, we have a beaten-down name entering the green zone right now.
Tradeweb Markets (TW) Can Gain 13% in the Months Ahead
Tradeweb Markets (TW) runs the digital platforms where Big Money trades credit, stocks, and money markets.
At last count, the firm connects over 3,000 institutional and retail customers globally.
This company offers around-the-clock access to marketplaces. And in 2025, the stock has shed 16%, vastly underperforming the S&P 500.
From its recent peak, shares have lost a quarter of their value and are now sitting at $110 per share:
One of the reasons this beaten-down name is interesting is simply due to the fundamental qualities.
In 2024, revenues hit $1.725 billion with net income reaching $501 million.
Estimates for 2025 peg revenues at $2.06 billion with net income ballooning to $816 million.
Growing sales and the bottom line are hallmarks of high-quality stocks.
But the main reason this stock is ready to bounce back comes down to a powerful green zone beginning now.
With this Seasonality Tool, TradeSmith crunched the numbers on all of TW’s trading history and found that, from Oct. 3- Dec. 11, TW shares often gain handsomely.
While Tradeweb’s trading history is limited, at six years, it’s still notable that all six of them were positive during this seasonal window. What’s more, the average return was 13.3%:
In other words, our signals led us to a stock with a track record of delivering twice the gain of the broad market in October through December.
This is the setup you seek out when stocks overall are expected to ramp in the near term.
But before you buy any stock, always check the overall health of the company.
The simple way to do that is by checking TradeSmith’s Quantum Score, which instantly ranks a company on its fundamental and technical qualities.
Tradeweb scores a mid-range 47.7, which is made up of a 14.7 technical score and 94.3 fundamental score.
This indicates a high-value company is on sale because the chart looks ugly.
That’s a feather in the bull’s cap. Especially since – without seeing what you saw from TradeSmith Seasonality – many of those investors might not know this is highly typical for TW stock before its October rally.
With its green zone window finally here, I’d expect TW to sail higher with seasonal tailwinds soon.
Let’s wrap up.
Big Septembers rarely come along. When they do, play for upside.
It’s tempting to get nervous and take to the sidelines. But before you do, remember that market-beating gains often arrive in the fourth quarter.
And with fundamentally sound stocks like this, you’re prepared for the best performance against this backdrop…
So make it a September to remember.
This bull could be heading much higher!
Regards,
Lucas Downey
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Source: TradeSmith