It’s hard to believe we’re nearing the halfway point of 2025, and what many thought would be a straightforward, bullish year has turned out to be anything but that. But the markets are clawing their way back into breakeven or slightly positive territory for the year, but can it last through the summer doldrums?
Despite Thursday’s pullback, the week’s tone remains cautiously optimistic—especially in small caps, where the Russell is up 1.5% week-to-date.
What’s Moving Markets?
- Tesla Trouble: A 14.3% dive on Thursday dragged the Nasdaq lower, as tensions between Elon Musk and President Trump boiled over.
It may be tempting to be bullish here based on the 2x ATR move it had in one day, but my data suggests you may want to be cautious with this move. Over the last two years, a 1x ATR move lower resulted in an average gain of 2.74% over the next 20 days with an accuracy rate of only 60%. While that may not seem bad, the average drawdown over the 20 days is a staggering 11.87%! Don’t be surprised if TSLA doesn’t bounce back right away.
- Layoffs & Earnings Cuts: P&G is slashing up to 7,000 jobs, while PVH and Brown-Forman both took hits after signaling softer consumer trends ahead.
P&G differs from TSLA in that my data shows that after a 1X ATR move lower (as seen yesterday), the stock tends to move higher over the next 20 days, with a win rate of 71.88%, an average gain of 1.52%, and an average drawdown of 2.99%.
If P&G drops further by 3% down to $158, the 27 JUN 155 / 150 put spread could be valued as high as 0.80 (even though that same spread is only worth 0.30 now). I’m adding this to my watchlist and may even enter a 0.80 GTC entry order.
- Tariff Jitters vs. Trade Hopes: Trump teased progress with China after a “very good” call with Xi Jinping—but traders have learned not to chase every headline.
Seasonal Strength: What’s Quietly Heating Up
While most of the market is catching its breath, a group of tickers is flashing a different message—historically strong seasonal patterns over the next 20–40 trading days with a 90% win rate over the last decade. That includes:
- TLT (long-term Treasuries)
- IBB (Biotech ETF)
- SSRM / AGI (Gold & Silver miners)
- APLD (crypto-related infrastructure)
- UPRO / SPY / DIA (broad-market exposure)
Why it could make sense:
TLT benefits when recession worries grow and yields drop—exactly what we’ve seen this week.
- Biotech shines in mid-year thanks to FDA news cycles and big medical conferences like ASCO.
- Gold miners often rally from late June into August on the back of macro uncertainty, inflation hedge flows, and seasonal demand.
APLD, a small-cap linked to digital infrastructure, could get caught in speculative summer rallies tied to crypto and AI.
- Leveraged ETFs like UPRO tend to outperform when volatility drops and the market drifts higher on light volume—classic summer behavior. The ticker could be on its way to $90 if it can break through its 200-day moving average at $84.
It’s not a guarantee, but the overlap between these names and current market conditions is worth watching. Seasonality may not drive trades alone, but when it lines up with the macro, it can tilt the odds.
What to Watch Next
- Today’s Nonfarm Payrolls report (expectations: slowdown from April). Here are the projections for the report.
- Bond market reactions—if yields sink, watch TLT and gold miners
- Rotation into small caps or defensive ETFs like DIA
Bottom Line: The S&P 500 may have lost some momentum, but history says this stretch of the calendar often favors specific pockets of the market. If the jobs data tilts dovish, expect a ripple effect across bonds, biotech, and defensive sectors—and possibly a short-term setup for a stealth summer rally.
