ETF Trades: October ETF Basket & Seasonal MACD Update – Still Pending! By: Christopher Mistal | October 02, 2025 | Email | Print

For those who were unable to attend 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). Jeff made the case for how S&P 500 could reach 7100 by the end of the year along with presenting updated versions of many of the seasonal pattern charts we have been tracking throughout the year. He also touched on Bitcoin, Ether, gold, silver, copper, crude oil and natural gas technicals and their respective seasonal setups and outlooks.

 

Historically when the market has defied typical seasonal weakness in August and September, subsequent performance in Q4 has been above average. Despite a mixed labor market, the economy appears to be on reasonably firm footing. Tariffs have not caused inflation to surge. The Fed is easing monetary policy while the AI-fueled boom continues. Barring the occasional headline induced volatility, the path of least resistance for the market is still higher. A trend that has been firmly in place since early April. Further confirmation from our Seasonal MACD Buy signal is likely to arrive soon.

 

 

 

As of today’s close, our Seasonal MACD Buy Signal is still on Hold. Faster moving 8-17-9 MACD indicators applied to DJIA and NASDAQ are negative. S&P 500’s modest gain did turn its MACD positive. Without agreement across DJIA, S&P 500, and NASDAQ, our Seasonal MACD Buy criteria have not been fully satisfied. 

 

The criteria to issue our Seasonal MACD Buy Signal is:

 

1. A new buy signal crossover using our 8-17-9 MACD indicator AND

2. The crossover must occur on or after the first trading day of October AND

3. DJIA, S&P 500 and NASDAQ MACD indicators must all agree.

 

Currently it would take single-day gains of +32.45 DJIA points (+0.07%) and +26.83 NASDAQ points (+0.12%) to turn DJIA and S&P 500 MACD indicators positive. If S&P 500 declines –6.42 points (–.10%), its MACD will turn negative. Continue to hold defensive, “Worst Months” positions. When all of the above criteria have been met, we will send a Special Email Alert.

 

 

Each year while preparing the annual Stock Trader’s Almanac, we review and re-analyze our sector seasonalities (STA 2025 and 2026 pages 94, 96 and 98) to adjust for any new or developing trends. There have been some minor revisions made to our Sector Seasonality table in recent years, but for the most part, sector seasonality has been reasonably on track with many sectors producing the bulk of their annual gains during their traditionally favorable periods. There have also been a few exceptions recently, most notably the Semiconductor sector that enjoyed substantial outsized gains due to AI developments and expectations. Years of sector research allow us to specify whether the seasonality starts or finishes in the beginning third (B), middle third (M) or last third (E) of the month based upon the number of trading days in the month. 

 

The 2026 Almanac table follows. Both long and short trade opportunities are researched and the most statistically viable appear below. Because indexes are not directly tradable, highly correlated exchange-traded funds (ETFs) are chosen to execute trades. When selecting a correlated ETF, we consider daily liquidity, length of time available, fees, and how closely it correlates to the sector index. Frequently this results in the use of many iShares and SPDR ETFs. Numerous other ETFs and mutual funds are available that may also be a better fit for your specific investment and trading objectives, and they are perfectly acceptable to substitute. Performance over the last 5-, 10- and 25-year time periods is included. We prefer to focus on the 25-year average performance as this period has sufficient data to be statistically significant by including bullish, bearish, and possibly even a flat year or two.

 

 

Entry and exit points in the above table will be the basis for our seasonal trades over the coming year. They are guidelines, as we generally look to enter new positions before the start of the favorable period and exit before its end. Occasionally a trade is closed out well in advance of the seasonality’s end. An outsized advance may trigger a trade at the suggested auto-sell price (a price target based upon past historical performance of the specific seasonality plus an additional percentage gain of 10% or 20%) or should strength fail to materialize, a stop loss could be reached.

 

There are thirteen sector seasonalities that enter their favorable periods in October. The following trade ideas are made based upon these seasonalities. Currently, all buy limits (the suggested maximum to pay for a share) are below current market levels as the market appears to be searching for support as longer-term Treasury yields have been creeping higher and geopolitical concerns are elevated. When our Seasonal MACD Buy signal triggers, we will evaluate adding open trade ideas at that time.

 

 

Transports enter their historically favorable season at the beginning of October, and it generally lasts until May. iShares DJ Transports (IYT) is attractive on dips below current levels with a buy limit of $70.50. The suggested stop loss is $62.22 and auto-sell is $88.98. Top 5 holdings are: Uber, Union Pacific, United Parcel Service, Norfolk Southern, and CSX Corp. Consumers are facing headwinds, but betting against them has not been a good strategy over any lengthy time period. This sector delivers for the consumer. Tariffs are likely dampening international activity, but if their intended consequence is to boost domestic production then this sector’s domestic operations could thrive.

 

 

Over the last 25 years, Telecom has generated an average return of 5.1% during its bullish seasonality from the middle of October to around yearend. The top ETF within this sector is iShares DJ US Telecom (IYZ). Use a buy limit of $31.95 and stop loss of $28.20. If above average gains materialize, take profits at the auto-sell of $36.95. Top 5 holdings are: Cisco Systems, AT&T, Verizon, AST SpaceMobile and Arista Networks. Lower interest rates and AI’s use of networks is likely to continue to drive the sector higher.

 

 

Semiconductors come into favor near October’s end and remain so until around mid-February. This trade has averaged 16.6% and 27.3% gains over the last 25- and 5-year periods, respectively. iShares Semiconductor (SOXX) is the top selection. Establish new positions with a buy limit of $276.20 and utilize a stop loss of $243.75. Take profits at the auto-sell of $354.35. Top 5 holdings are: Broadcom, Nvidia, Advanced Micro Devices, Qualcomm, and Micron Technology. Aside from AI, these companies design and produce the chips that run or provide advanced features to nearly every modern convenience enjoyed daily around the world.

 

 

Although consumer spending is spilt into two distinct sectors, Discretionary and Staples, their favorable seasons run concurrently from the beginning of October to the beginning of June in the following year. Over the past 25 years Discretionary has an average gain of 13.1% and Staples 8.5%. SPDR Consumer Discretionary (XLY) and SPDR Consumer Staples (XLP) are the preferred vehicles to execute these trades. XLY can be considered on dips below $238.10. An initial stop loss of $210.12 and an auto-sell at $296.25 are suggested. XLY Top 5 holdings are: Amazon.com, Tesla, Home Depot, McDonald’s, and Booking Holdings. Please note that AMZN and TSLA represent over 42% of XLY’s holdings as of October 1, 2025.

 

XLP could be purchased on dips below $77.40. Our suggested stop loss is $68.31 and set an auto-sell at $92.35. XLP Top 5 holdings are: Walmart, Costco Wholesale, Procter & Gamble, Coca Cola, and Philip Morris. For tracking purposes, there are two XLP trades listed in the Sector Rotation ETF portfolio. The older position will be closed out when our Seasonal MACD Buy Signal triggers. Members holding an existing position could continue to hold and/or add to their existing XLP position.

 

 

The line between Broker/Dealer and Banking sectors is somewhat blurry with each sector averaging gains of 12.8% and 11.9% over the last 25 years, respectively. Instead of trading two smaller, somewhat less liquid ETFs, SPDR Financial (XLF) still appears to be the better choice. Consider using a buy limit of $52.85 and a stop loss of $46.64 once a position has been entered. The auto-sell is $65.08. Its holdings cover all things financial from insurance companies to stock exchanges. Top 5 holdings are: Berkshire Hathaway, JPMorgan Chase, Visa, Mastercard, and Bank of America. As long as the jobs market remains reasonably firm, profits for these two sectors are likely to hold up. And as the Fed cuts rates the yield curve is likely steepen, which has historically been positive for banks.

 

 

Another area exhibiting a reasonable amount of overlap is the Healthcare and Pharmaceutical sectors, at least as far as many ETFs are concerned. Healthcare has racked up an 8.7% average return over the past 25 years while Pharmaceutical alone has been 6.2%. SPDR Health Care (XLV) does an excellent job of representing both sectors and comes with the bonus of also holding several well-established biotechnology companies. XLV is attractive, below current levels with a buy limit of $140.50. The stop loss is $123.99, and the auto-sell is $168.06. Top five holdings are: Eli Lilly, Johnson & Johnson, AbbVie, UnitedHealth Group, and Abbott Laboratories.

 

 

Industrials have a favorable period that runs from the end of October through the middle of May with historical returns averaging 11.3% over the last 25-year period. Buy SPDR Industrials (XLI) on dips with a buy limit of $152.65. Once purchased, set a stop loss of $134.71 and an auto-sell of $186.89. Top 5 holdings are: GE Aerospace, Caterpillar, RTX Corp, Uber, and GE Vernova. AI, Federal infrastructure spending, conflict in Europe and Mideast, and a growing global population will all support expanding demand for the products and services supplied by this sector. 

 

 

Materials have a favorable period that runs from the beginning of October through the beginning of May with historical returns of 15.4% over the last 25-year period. Buy SPDR Materials (XLB) on dips with a buy limit of $87.45. Once purchased, set a stop loss of $77.17 and an auto-sell of $110.99. Top 5 holdings are: Linde, Newmont Corp, Sherman-Williams, Ecolab, and Vulcan Materials. U.S. GDP has improved this year which is likely to continue to create steady demand for the products supplied by the materials sector.

 

 

Computer Tech has historically come into favor in early October and remained so until the beginning of January. This trade has averaged 11.4% and 13.2% gains over the last 25- and 5-year periods, respectively. SPDR Technology (XLK) is the top selection. Enter this trade on dips with a buy limit of $281.25 and employ a stop loss of $248.20. Take profits at the auto-sell of $344.67. Top 5 holdings are: NVIDIA, Microsoft, Apple, Broadcom, and Palantir. Apple, Microsoft, and NVIDIA combined account for 39.56% of total assets as of the October 1 close. It’s safe to say you are already familiar with these companies and currently use their products and/or services. Many are directly investing in AI and/or automation that is likely to continue to fuel the economy and market higher.

 

 

Real Estate has seen returns of 10.7% over the last 25 years from the end of October to the beginning of May. Vanguard REIT (VNQ) is our choice. Use a buy limit of $90.55 and a stop loss of $79.91 once a position has been entered. The auto-sell is $110.22. Top 5 holdings are: Vanguard Real Estate II Index fund, Welltower, Prologis, American Tower, and Equinix. Lower interest rates should continue to support the real estate sector.

 

 

 

There are two SPDR Consumer Staples (XLP) trades in the portfolio table below. For tracking purposes, the oldest position will be closed out when our Seasonal MACD Buy signal triggers and the new position will be added. As a “Worst Months” defensive position, XLP was essentially flat excluding dividends and any trading fees. If you hold an existing position in XLP, it can still be held or added to for the upcoming bullish seasonality.

 

SPDR Utilities (XLU), the other “Worst Months” position will also be closed out when our Seasonal MACD Buy signal triggers. XLU has performed well this year and was up 17.8% as of the close on October 1.

 

The three trades put in place to potentially benefit from a weaker U.S. dollar, FXE, FXF, and DBA are on Hold. The U.S. dollar has weakened, but the pace of its decline as slowed. Lower interest rates could cause the dollar to weaken further, but many other developed countries are also cutting their lending rates and weakening their own currency.

 

SPDR Gold (GLD) is on Hold. Gold has enjoyed a record setting run with repeated new all-time highs, but its rally may have gotten ahead of itself. It could be due for a pause and period of consolidation before resuming its rally. Silver has also surged higher. Unfortunately, iShares Silver (SLV) did not dip below its buy limit before the rally. If gold does take a breather, silver could also. SLV can still be considered on dips.

 

IBB, XBI, and IYW can also be considered on dips below their buy limits or when our Seasonal MACD Buy signal triggers. Associated sector seasonalities for biotech and infotech run until next year leaving ample time for further gains.

 

Our seasonal-based bitcoin trade, iShares Bitcoin (IBIT), just missed trading below our buy limit in late September. IBIT can still be considered on dips below $67.00 or when our Seasonal MACD Buy signal triggers.

 

 

 

In preparation for the start of the “Best Months” and our Seasonal MACD Buy, Invesco QQQ (QQQ), iShares Russell 2000 (IWM), SPDR DJIA (DIA) and SPDR S&P 500 (SPY) have been added to the portfolio table. These are our preferred ETFs to trade our Seasonal Switching Strategy. Alternate ETFs and mutual funds are also perfectly acceptable. If you do not have access to these exact ETFs, the idea would be to find ETFs or mutual funds with similar characteristics and/or holdings to trade instead. Your plan/account administrator is one resource to consider using. Another is the “free” sections of https://www.morningstar.com/. Page 38 of the 2026 Almanac also has additional details.

 

Positions in bond ETFs, TLT, AGG, and BND are on hold. Their performance this year was mixed when dividends are not considered. SHV and SGOV have offered a fair yield around 4% and a generally stable price during the “Worst Months.” SHV and SGOV are also on Hold.