If you missed the member’s only webinar on Wednesday, the slides and video recording are available
here (or copy and paste in a new browser window:
https://www.stocktradersalmanac.com/LandingPages/webinar-archive.aspx). In the webinar we reviewed key seasonal pattern charts that we have been tracking throughout the year, current GDP and inflation trends, Fed interest rate expectations, and what we anticipate during September and beyond.
In the near term, we still cannot rule out the possibility of some market weakness and volatility in seasonally weak September or later in the year. The Fed appears to be uncertain about everything other than the obvious, inflation is still above its stated 2% target. And the war with Iran is a shooting war once again. Some clarity on either front would likely be welcome by the market but until that arrives the market remains susceptible to headlines.
Strong S&P 500 August
S&P 500 finished August 2026 with a solid 2.62% gain, placing this year in the top third of August performances since 1950, according to the historical data in the accompanying table. The question now is whether that strength can carry beyond August into the remainder of the year or whether September’s notorious seasonal weakness will interrupt the advance.
History offers an interesting answer. Among the top third August performers, S&P 500 has gained an average of 4.4% in August, followed by an average 0.8% decline in September. September has been higher just 32% of the time in these years, with 17 declines versus only 8 advances. But the weakness has generally been temporary. S&P 500 gained an average of 1.3% (2.8% median gain) during the rest of the year, resulting in a respectable 9.1% average full-year gain.
The contrast with weak August years is striking. When August falls into the bottom third, S&P 500 has averaged a 4.9% loss in August and another 1.2% decline in September, before rebounding with a 4.7% average gain during the remainder of the year. Full-year performance also slumped significantly to an average gain of 5.1% with just 52.0% of the years finishing higher.
When August landed in the middle third of S&P 500 performance rankings, September was notably stronger than the top third or bottom third, up 57.7% of the time with an average gain of 0.1%. Rest of the year performance matched the bottom third while full year performance was the best with an average gain of 14.2% (median of 19.3%), and higher 88.5% of the time.
An above average August has not historically eliminated September risk. The possibility of a September pause and/or pullback still remains.
Employment Data Catalyst
Tomorrow morning, the market’s attention will likely be keenly focused on the August Employment Situation report, as traders and investors look for clues about the health of the labor market and the Fed’s next move with interest rates. Current estimates call for a modest rebound in hiring, with forecasts generally around 50,000–65,000 new nonfarm payrolls and an unemployment rate of approximately 4.2%.
FactSet’s latest median estimate is 65,000 jobs and a 4.2% unemployment rate.
That would represent an improvement from July, when payrolls declined by 23,000. But Wednesday’s ADP report provided little evidence of a dramatic labor-market rebound. Private employers added just 38,000 jobs in August, below the 48,000 expectation. The gain was also ADP’s weakest since January, with manufacturing and professional/business services among the sectors shedding jobs.
Historically, the September employment report has had a mixed response from stocks. Since 2004, S&P 500 has gained on September Employment Report Day in 11 of 22 years, producing an average decline of 0.24% and a median change of just –0.03%. NASDAQ has been weaker, rising only 9 times (down seven of the last eight years) and averaging –0.37%.
The jobs data could have major implications for Fed policy. A significantly weaker-than-expected report would reinforce concerns that employment is deteriorating and could weaken the case for further rate hikes. Conversely, a stronger report could bolster the Fed’s hawkish stance. As of ~4pm EDT on September 3, the CME Group’s FedWatch Tool has the odds of a September Fed rate hike at a hair splitting 50.4%.
In short, Friday’s report has the potential to be a market mover. A weak number could revive hopes for easier monetary policy, while a stronger-than-expected jobs report could reinforce the Fed’s hawkish posture and add another layer of uncertainty to an already seasonally challenging September.
Bitcoin’s Seasonal Low
Since the release of the report back in 2023, we have been tracking bitcoin on a consistent basis in the monthly member’s only webinar. Included in the September 2026 slides are a pair of updated seasonal charts of bitcoin. One chart compares 2026 to all years and the second includes bitcoin’s seasonal trend in midterm years. Both charts point to a typical seasonal low in September or October. This year, it looks like bitcoin hit its low early and is now potentially breaking out back above $80,000.
The above chart is iShares Bitcoin Trust (IBIT), our preferred ETF to trade the seasonal setup in Bitcoin. It is highly liquid, easily accessible and has relatively low fees. There are other ETFs available that also track Bitcoin, which are also perfectly fine options, but IBIT is the one we will use. We strongly encourage taking a moment and visiting www.ishares.com to review all relevant documents and information prior to executing any trade in IBIT.
Bitcoin and IBIT bounced off of their respective late-July lows and spent July and the first half of August trading effectively sideways before leaping to just below current levels in the second half of August. IBIT has reclaimed its 20-, 50-, and 200-day averages and MACD is positive and trending higher. IBIT can be considered near current levels or on dips below a buy limit of $46.00. This price appears to correlate to a Bitcoin price of around $81,000. For tracking purposes, IBIT will be added to the Almanac Investor Sector Rotation ETF Portfolio using its average price on Friday September 4.
Given the amount of volatility Bitcoin and IBIT have exhibited recently, there is no suggested stop loss at this time. There is also a possibility that the current breakout, above $80,000, triggers some profit taking and a period of consolidation. Should this transpire, there will likely be opportunity to purchase IBIT at less than the buy limit. The midterm year low for bitcoin is most likely in. Given its historical performance off past midterm lows, Bitcoin’s new bull market likely has substantial upside remaining.
Sector Rotation ETF Portfolio Updates
Higher Treasury bond yields continue to pressure some defensive positions in the portfolio. SPDR Consumer Staples (XLP) was up 3.0% as of the close on September 2 while SPDR Utilities (XLU) was down 8.7% since being added to the portfolio back in March. XLP and XLU are on Hold.
After a sluggish start, gold mining positions in VanEck Gold Miners (GDX) and VanEck Junior Gold Miners (GDXJ) surged higher throughout August as physical gold rebounded off its July lows. GDX and GDXJ were up 23.8% and 22.9% respectively as of September 2, close and both added over 3% today. GDX and GDXJ are on Hold. Please note that corresponding stop loss and auto-sell prices have been updated to account for recent gains. As a reminder, auto-sell prices are one path to taking profits. If not inclined to exit at the suggested auto-sell price, a trailing stop loss can also be effective.
SPDR Gold (GLD) and iShares Silver (SLV) were up 5.8% and 5.5% respectively. Our early July entry was early. GLD and SLV can still be considered at or near current levels up to their updated buy limits.
New positions in iShares Biotech (IBB), SPDR S&P Biotech (XBI) and iShares US Technology (IYW) associated with corresponding sector seasonalities that typically begin in August have not been added to the portfolio yet as no meaningful dip or retreat materialized in August. IBB, XBI, and IYW can all still be considered on dips below their respective buy limits. If not added beforehand, we will likely consider adding them when the Seasonal MACD Buy signal triggers.
Existing positions in IBB and XBI, presented on April 30, as a Worst Months defensive trade are on Hold. Prior to today’s minor retreat by IBB and XBI, they were up an average of 28.2% Stop losses for these existing trades have been adjusted for their gains. For tracking purposes, these positions will be closed when the Seasonal MACD Buy Signal triggers or if they close below their respective stop loss prices.
Positions in IDV, EFAV, EFV, and XLV are on Hold. Note updated stop loss prices in the table below.
Tactical Seasonal Switching Strategy Portfolio Update
Longer dated Treasury bond yields did retreat today, and shares of TLT, AGG and BND did move slightly higher today, but as of their respective closes on Wednesday, September 2, all were underwater excluding dividends. Continue to Hold TLT, AGG, and BND. There are numerous inflation and economic data points before the Fed’s next meeting. Softer labor market data and inflation could easily shift the Fed to a less hawkish stance and likely bring TLT, AGG, and BND back into the green.
After paying their respective dividends, short-term bond ETFs, SHV and SGOV were fractionally negative as of their September 2 closes. SHV and SGOV are on Hold. We anticipate holding all bond ETFs until our Seasonal MACD Buy signal triggers. As of September 2, 2026, SHV and SGOV have 30-day SEC yields of 3.62% and 3.63% respectively.
As a reminder, the earliest the Seasonal MACD Buy signal can trigger is the first trading day of October (10/1/2026). The criteria to be satisfied is a new positive crossover on MACD (8-17-9) and DJIA, S&P 500 and NASDAQ must all agree/confirm. If two are positive and one is not, the criteria are not satisfied. We anticipate a deeper review of the Seasonal Buy Signal setup later this month.
Disclosure note: Officers of Hirsch Holdings Inc hold positions in EFAV, EFV, GLD, IBB, IDV, XBI, XLP, XLU and XLV in personal accounts.