July 1, 2025 5:30 PM

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Why July Is the Market’s Favorite Month (And What That Means for You)

Stocks don’t always follow logic, but they do follow patterns. Here’s the one that could shape your July.

Every once in a while, the market sends up a flare. It doesn’t bark. It doesn’t shout. It just raises an eyebrow, as if to say: “Pay attention.”

That’s what happened during Thomas Wood’s end-of-month and end-of-quarter video presentation in our trading room. It wasn’t a bombshell. It was something quieter, but ultimately more telling…the kind of insight that hides in plain sight.

Here it is: For the past 10 years, the month of July hasn’t closed in the red. Not once.

Yes, seasonality, the study of recurring patterns in the market tied to the calendar, is a soft science. But if you’ve been investing long enough, you know this: the calendar matters. Some months have a rhythm to them, a tendency to lean bullish or bearish, often due to a repeatable mix of earnings cycles, fund flows, economic releases, or simply good old-fashioned investor psychology.

July, as it turns out, is the market’s golden child.

Unlike the cautionary fog of September or the euphoric sugar rush of December, July tends to be a clean, optimistic month. Earnings season kicks off. Fund managers, buoyed by strong Q2 results, often start putting money to work again. And the Fourth of July holiday truncates the trading week, meaning lower volume and often, ironically, less volatility. Fewer traders at their desks sometimes leads to fewer surprises. The market drifts upward, quietly and without much fuss.

It’s not just a fluke of the past decade. Historically, July has been one of the better-performing months for equities, especially when Q2 closes strong and economic fears are muted. This year is shaping up to follow that script.

But let’s go deeper.

July’s bullish undercurrent isn’t the only pattern worth watching. We’re positioning ourselves not just to ride the seasonal tide, but to capitalize on other, more specific opportunities. Case in point: natural gas.

Natural gas is currently trapped in an unflattering limbo, caught between weak demand and bloated supply. Weather patterns are contributing to lower cooling needs in major consuming regions, while production remains high. Inventories are running above their five-year averages. The result? Downward pressure.

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We’ve taken a bearish stance on nat gas for some time now, and it’s paying off. Our puts on UNG (the United States Natural Gas Fund) are already up 55%. And we’re not cashing out just yet. There’s still room to fall, and the technicals agree.

UNG has been unable to break key resistance levels, and the downward-sloping 20-day moving average continues to act like a ceiling. Momentum oscillators are leaning bearish, with the Relative Strength Index (RSI) hovering in neutral-to-weak territory and the MACD histogram signaling continued downside. Translation: we’re still short, and happy to be so.

While the nat gas trade plays out in our favor, we’re also seeing an opportunity on the other end of the risk spectrum: bonds.

Yes, bonds. Often overlooked in favor of flashier equities, bonds are showing signs of strength this month. July historically tends to be kind to Treasuries, especially in years when inflation expectations are drifting lower or the Federal Reserve is seen as taking its foot off the brakes.

Technical indicators are turning friendly, too. The TLT ETF (which tracks long-term Treasury bonds) recently bounced off support near its 200-day moving average. Volume on up-days is outpacing volume on down-days, a classic accumulation signal. Meanwhile, stochastics are curling up from oversold levels, hinting that institutional money may be quietly creeping back into bonds.

A rally in bonds could act as a counterbalance to any volatility in equities, which is why we maintain a bullish bias there. Think of it as diversification with a technical edge.

Our stance, as the dog days approach…

So where does that leave us, heading into the dog days of summer?

We’re positioned to ride a historically bullish July in equities, stay tactically short in natural gas, and begin layering in exposure to bonds. That’s not guesswork; it’s a blend of seasonality, technical analysis, and plain old pattern recognition.

Of course, past performance is no guarantee of future returns. But it’s often the closest thing we have to a road map. And when the road ahead looks familiar, it pays to trust the terrain.

If you’re not already doing so, this is the time to be tactical. Let the calendar work for you. Pay attention to the clues the market leaves behind. And don’t be afraid to lean into trends when the signals line up.

Because in the end, investing isn’t about magic. It’s about noticing what’s worked before…and having the discipline to act when it starts working again.

Have questions or want to dive deeper? Drop us a line at feedback@basecamptrading.com

And to see everything Thomas laid out in his video, including how we’re using macro and technical signals to shape our trading ideas, Click here to watch the video and access a sample of our proprietary trading rooms. That’s where the real edge lives: with a team that’s been reading the markets for decades and helping subscribers profit from what most investors miss.

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