Products
SentimenTrader Trading Tools
‍
Backtest Engine
My Trading Toolkit
Correlation Analysis
Seasonality
Market Prediction
Indicators & Data API
‍
Proprietary Indicators & Charts
Market Data API
Strategies & Scanner
‍
50+ Trading Strategies
Smart Stock Scanner
Smart Option Scanner
Research Reports
‍
Research Solutions
Reports Library
Free Resources
Simple Backtest Calculator
Simple Seasonality Calculator
The Kelly Criterion Calculator
Sentiment Geo Map
Public Research Reports
Education
Sentiment Indicators
Technical Indicators
Pricing
Company
About
In the News
Testimonials
Client Success Stories
Contact
Log inLoginSign up
< BACK TO ALL REPORTS

Two areas where investors should tread lightly

Jay Kaeppel
2026-05-11
Figuring out where to invest is essential to making money in the market. At the same time, figuring out where not to invest can also be valuable. This note highlights two sectors currently facing potential headwinds.

Key points:

  • Almost everyone recognizes that making money in the markets is a function of where you invest
  • However, it is also a function of where you don't invest; i.e., how you allocate capital is a key to successful investing
  • Two areas I am avoiding at the moment are the Financial sector and the Turkish stock market
  • Both are facing serious seasonal headwinds and other unfavorable indicator signals

Seasonality suggests poor odds for Financials

Seasonality is not something that should be relied upon as a sole determining factor in identifying a trading opportunity - or lack thereof. However, it can be an extremely useful filter for telling us "When to look where" for both high- and low-probability opportunities. The chart below shows the annual seasonal trend for the IShares Financial Sector ETF (XLF).

As you can see in the chart above, the odds do not favor the financial sector during the period from Trading Day of the Year (TDY) #88 to #121. For 2026, this period extends from the close on May 8 through the close on June 26. How has XLF performed historically during this period? The chart below shows the hypothetical growth of $1 invested solely in XLF during the TDY #88 through #121 each year since 1999, when X

Sorry, you don't have access to this report

Upgrade your subscription plan to get access
Go to Dasboard
PRODUCTS
SentimenTrader
Trading Tools
Indicators & Data API
‍
Strategies & Scanner
‍
Research Reports
FREE
RESOUrCES
Simple Backtest
Calculator
Simple Seasonality
Calculator
The Kelly Criterion
Calculator
Sentiment Geo Map
‍
Public Research Reports
‍
Education
Sentiment Indicators
‍
Technical Indicators
‍
Pricing
Bundle pricing
‍
FAQ
‍
Announcements
‍
COMPANY
‍
About
‍
In the News
‍
Testimonials
‍
Client Success Stories
CONTACT
‍
General Inquiries
‍
Media Inquiries
‍
Financial Professionals Inquiries
‍
© 2026 Sundial Capital Research Inc. All rights reserved.
Setsail Marketing
TermsPrivacyAffiliate Program
Risk Disclosure: The information and tools provided are for research and analytical purposes only and are not intended as investment advice. Market analysis involves uncertainty, and outcomes may differ from expectations. Users should conduct their own due diligence and consider their individual circumstances before making any financial decisions. Past performance is not necessarily indicative of future results.

Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

Testimonial Disclosure: Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.