When Will the Stock Market Bottom: A Comprehensive Study

When does the stock market bottom? A look at seasonal patterns

Stock market bottoms don’t happen at random. Research shows that they often show up around the same months—October, March, and December. That pattern holds up when you look at historical data going back to 1985.

These months pop up repeatedly during major downturns, suggesting that the market tends to find a bottom in the fall or spring. But while seasonal patterns are interesting, they’re far from foolproof.

The market doesn’t always follow the same seasonal trends, while plenty of bottoms have happened outside those windows. Studying these Historical Corrections will not only unveil seasonal patterns but also help you look for clues that the market is about to turn.

How do we define a stock market bottom?

Typically, a bottom forms after a significant selloff – usually a drop of 15% or more from recent highs. During this period, investor fear is high, and many traders sell in a panic, driving prices to extreme lows.

Prices often fall faster and further than fundamentals would suggest. You’ll usually see a few key signs during this phase:

• Capitulation: Selling volume spikes as investors throw in the towel.
• Pessimism everywhere: Financial headlines turn gloomy, and sentiment surveys show extreme fear.

After extreme selling, the price will begin to stabilize – A stock market bottom takes time. There will often be volatile price action as buyers begin accumulating shares and sellers disperse.

Eventually, you will see a shift in sentiment when:

• Price Stabilizes: Eventually, buyers step in and balance out the sellers.
• Price structure shift: Instead of falling lower, the market starts forming higher highs and higher lows.

But even with these patterns, trying to predict the exact timing is tricky.

When has the stock market bottomed since 1985?

Let’s look at the data. Since 1985, the S&P 500 has experienced nine major corrections of 15% or more. Here’s a breakdown of when they occurred and how deep they went:

Peak Date	Trough Date	Month of Bottom	Percent Loss
8/25/1987	12/4/1987	December	-33.5%
7/16/1990	10/11/1990	October	-19.9%
7/17/1998	8/31/1998	August	-19.3%
3/24/2000	10/9/2002	October	-49.1%
10/9/2007	3/9/2009	March	-56.8%
4/29/2011	10/3/2011	October	-19.4%
9/20/2018	12/24/2018	December	-19.8%
2/19/2020	3/23/2020	March	-33.9%
1/3/2022	10/12/2022	October	-25.4%

These corrections came from different causes, but the timing of their bottoms shows some interesting patterns.

What the patterns tell us about stock market bottoms

Out of the nine major corrections:

• October was the bottom month four times.
• March and December each saw two bottoms.
• August only had one.

That means fall and spring are the most common bottoming seasons. October, in particular, stands out as a recurring bottom month, possibly because many financial crises and crashes historically occurred around that time (like the 1987 crash and the 2008 collapse).

So if you’re looking for signs of a reversal, those seasons might be a good place to start.

Just remember, patterns don’t guarantee outcomes – They just give us clues.

Why economic context matters more than the calendar

While seasonal patterns are interesting, what really drives market bottoms are economic and global events.

Each major decline came with its own backstory:

• 1987: Black Monday was triggered by computerized trading and excessive leverage.
• 1990: Gulf War uncertainty and a mild recession.
• 1998: Contagion from the Asian financial crisis and Russian debt default.
• 2000–2002: Collapse of the dot-com bubble.
• 2007–2009: Global financial crisis triggered by the housing market and subprime lending.
• 2011: The European sovereign debt crisis shook confidence.
• 2018: Trade tensions with China and hawkish Fed policy.
• 2020: Rapid pandemic-driven shutdowns worldwide.
• 2022: Soaring inflation and aggressive rate hikes by central banks.

The calendar didn’t cause those bottoms; economic shocks did. The season may influence investor behavior, but real-world catalysts are what move markets.

Can we really predict when the stock market bottoms?

The short answer: No.

Even with seasonal patterns in mind, predicting the exact timing of a market bottom is nearly impossible. Markets react to:

• Sudden geopolitical events
• Shifts in GDP or earnings growth
• Changes in unemployment
• Central bank decisions, especially interest rate policy

All of these factors can send the market sharply lower, or spark a recovery. None of them are tied to a specific date on the calendar.

If you’re investing, it’s smarter to focus on risk management, portfolio strategy, and long-term planning than trying to catch the exact bottom.

Taking a look at market bottoms

Final thoughts on stock market bottom patterns

Here’s what we’ve learned:

• There have been nine major drops of 15% or more since 1985.
• October is the most common month for bottoms, followed by March and December.
• Fall and spring appear to be the “seasons of reversal.”

But while those patterns are useful to know, history only offers hints, not answers. Markets are messy, and every bottom is shaped by unique events.

Instead of guessing when the next bottom will hit, focus on staying prepared, building a strategy, and managing risk. That way, whenever the next market turn comes, you’ll be ready.