Time ▾ Price ▴ Research: 40-Week Cycle

Showing posts with label 40-Week Cycle. Show all posts

Sunday, April 19, 2026

S&P 500 Bear Outlook Intact: Q3 3.5-Year Hurst Cycle Low | Namzes

The big picture remains unchanged: I still expect a bear market, with a buyable 3.5-year Hurst cycle low in Q3 2026. The 20-week cycle low arrived on schedule—just one day after the ideal March 27 (Fri) window outlined in my 2026 forecast.

Chart 1: The new 20-week cycle could run higher into late May. The current 40-day cycle is now about halfway through.

I didn’t expect new all-time highs—my plan was for a rejection at the golden pocket retracement. Instead, a mix of CTA driven mechanical buying and Trump playing the market like a violin produced the blow-off top I’d anticipated back in February. The market always finds a way to humble you.

The current 40-day cycle is roughly halfway complete (Chart 1). Next week should clarify whether the rally has further upside or is topping out. In my base bear case, April 17 was flagged as a potential turning point, but so far there are no signs of buying pressure slowing. Options expiration (OPEX) often serves as a pivot—either on the day itself or shortly after.

From a Hurst cycle perspective, the S&P 500 may still have several percent of upside left. That said, I’m not chasing it. As in February, I’ve stepped aside—risk/reward isn’t compelling for my multi-month holding framework, especially with weekend headline risk in play.

Timing-wise, the next 40-day low is due around May 7 (Thu). That should provide clearer insight into structure—namely the depth of the pullback and the strength of the rebound into late May (Chart 2). This sequence would then feed into a larger decline toward a higher-degree summer low. Leading indicators continue to point to a more meaningful downside move in the weeks ahead, so I remain heavily in cash.

Chart 2: Options expiration (OPEX) often acts as a pivot, either on the day itself or a few days after.

Next 40-day low due around May 7 (Thu), followed by a rebound into late May.

Short-term models have triggered a buy signal. If you’re leaning bullish, the new 20-week cycle could extend into late May, including a typical retest of the May 40-day low. However, given the negative pressure from the dominant 3.5-year cycle, my base case is that this rally is a false breakout—likely forming another divergent top and unlikely to persist beyond April.

It’s extremely rare for a 40-week cycle (top panel, Chart 3) to undercut its prior low and still go on to make new highs. In S&P 500 history, I could identify only one comparable instance. The usual structure in such cases is an M-shaped pattern with a clear bearish bias, as highlighted by the arrows.

Chart 3: It’s rare for a 40-week cycle to undercut its low and still go on to make a new high.

Bottom panel shows 20-week cycle, expected to synchronize with the 40-week cycle around July.

That’s exactly how I expected the current 20-week cycle to unfold. That said, we now need price action to confirm emerging bearish signals. A bullishly configured cycle could still extend into June. While models have triggered a buy signal, participation remains narrow and volume is light. In my view, a downside resolution over the next few weeks remains the highest-probability outcome—but it still requires confirmation. Cycles define the setup; price action and models provide the trigger. The bottom panel shows the 20-week cycle, which I expect to synchronize with the 40-week cycle around July.

To illustrate what typically happens after a 20-week cycle low when the 40-week cycle has already failed, we can look back at Q1 2022 (Chart 4). In January of that year, the price made a lower low, confirming that the 40-week cycle had failed and signaling the start of a larger-degree correction.

Chart 4: Typical outcome after a 20-week low when the 40-week cycle has already failed.

This was followed by a series of bounces that retraced some of the decline but failed to make new highs. The market then rolled over and established new lows. This pattern is typical behavior roughly 99% of the time.That’s why I’ll be watching closely to see whether the current breakout turns out to be a deviation that ultimately resolves to the downside over the next few weeks, especially with the longer 3.5-year cycle exerting downward pressure.

I'm watching for a potential Wyckoff upthrust after distribution (UTAD) to play out over the next few weeks (Chart 5). For the bulls, it's critical to keep any pullbacks shallow and hold above the 2026 opening price at SPY 685.71, as well as above the overall consolidation range.

Chart 5: Watching for a potential Wyckoff UTAD to unfold in the coming weeks.

Doing so will help avoid the setup looking like a classic false breakout. I've also overlaid the 2022 bear market in yellow for reference, in case the bearish thesis unfolds and we see a similar structure develop.

Reference:
Namzes (April 17, 2025) - S&P 500 Bear Outlook Intact – Q3 3.5-Year Cycle Low.

See also:
Namzes (January 10, 2026) - 2026 Hurst Cycles Playbook for the S&P 500.
Namzes (January 1, 2026) - 2026 US Stock Market Forecast: 25% Bear Market and Recovery.

Krasi (April 19, 2026) - This is a 4-year cycle high—don’t get too excited.

David Hickson (April 7, 2026) - Twenty-Week Cycle Trough Or Greater? (video)

Thursday, April 16, 2026

S&P 500 After Rapid 10% Gains: +17% Avg One-Year Return | Alex Krainer

Historical S&P 500 data shows that sharp 10% rallies over a 10-day span tend to exhibit strong follow-through. On average, returns have been approximately +0.6% after one week, +2.5% after one month, and +17% over the following year.

Rapid 10%+ bounces in the S&P 500 (weekly candles), 1980 to 2026.

A review of the weekly S&P 500 chart from 1980 to 2026 highlights multiple instances of these "rapid +10% bounces," marked by green and red arrows. In most cases, these moves were followed by continued upside, though there were notable exceptions—such as the period around 2000.

Alex Krainer argues that the current setup differs meaningfully from the 2000 episode. He notes the absence of broadly synchronized overbought conditions among megacap stocks today, and emphasizes that the more significant declines in 2000 occurred only after the index had already fallen below its 40-week moving average.

S&P 500 RSI readings above 70 have led to pullbacks in 8 of the last 10 cases over two years, with the other two resulting in flat consolidation. The daily chart (May 2024–April 2026) marks these signals with red arrows for pullbacks and one green arrow, alongside recent price action near 7,000. This suggests an 80% likelihood of a near-term pullback, though prior corrections since the 2025 rally have been relatively mild.

Reference:
Alex Krainer (April 16, 2026) - Rapid S&P 500 10% rallies in 10 days historically show strong follow-through.

Jeffrey Hirsch notes that the S&P 500's 7.57% gain in the first 10 trading days of April 2026 ranks as the second-strongest start to April since 1950.

Gains averaged +10.8% for the rest of the year, with full-year returns positive in 91.7% of cases (+16.2% avg.).

Historically, such powerful early-April momentum has been a bullish signal: in 20 of 24 comparable cases (83.3%), the market delivered further gains over the remainder of the year, with an average advance of +10.8%. Full-year returns were positive in 22 of those 24 instances (91.7%), averaging +16.2%. Hirsch’s data also segments April starts into performance tiers, with 2026 firmly in the top group—where subsequent returns have consistently outpaced those seen in the middle and bottom tiers.

Thursday, March 19, 2026

20-Week Cycle Low in the S&P 500 and US Stock Indexes | Major Low in July

The projected 20-week cycle low arrived today, Thursday, March 19, at 9:35 AM, 118.12 days after the 40-week cycle low on Friday, November 21, 2025, at 10:30—in the expected price zone.

SPY (daily candles): 20-week cycle from November 21, 2025 into March 17-19, 2026.

[Projection as of February 22, 2026.]

SPY (daily bars): 20-week cycle from November 21, 2025 into March 19, 2026.

The final nominal 5-day cycle low within the nominal 20-week cycle was projected from the S&P futures low at the open on Sunday, March 15 at 5:00 p.m. (EDT) into the nested 20-week cycle low on Thursday, March 19 at 9:35 a.m. All projected times and dates of highs and lows in the thick blue summation lines, also shown in the charts below, are derived from current cycle periods and are—within the cyclic composite model—mathematically precise to eight decimal places. Cycle periods during the most recent 20-week cycle have been exceptionally stable and reliable; however, they may contract or expand by fractional harmonic offsets (IBPs and ITWs in Delta-lingo).

Tomorrow, March 20, 2026, at 10:46 a.m. EDT, Mercury stations direct precisely at the spring equinox as the Sun enters 0° Aries, with the New Moon conjunct Saturn and Neptune in early Aries.

This creates a strong geocosmic reversal zone. Cycle lows or significant momentum shifts are likely in stocks, metals, grains, and interest-rate markets.

Schematic trajectory of the current 40-week cycle from November 21, 2025 into the 18-month cycle low in mid-July (±).

At the same time, March triple witching and options expiration may drive higher volume and support a bullish turn in the US stock market into the next 10-week cycle, with an early April lower high. Lower highs and lower lows are expected into a major low of at least 18-month cycle magnitude by July 2026.

The upcoming 10-week cycle (80-day cycle).

Reference:

TPR (February 22, 2026) - S&P 500 Hurst Analysis: Projection into Mid-March 20-Week Cycle Low.

TPR (2025) - Insights into J.M. Hurst's 40-Week Cycle AKA the 9-Month Cycle.

The principle of harmonic nesting and the synchronicity of lows:

Hurst Method Nominal Market Cycle Chart by Richard Russell, Dow Theory Letters, 1985.

Thursday, February 19, 2026

2026 Market Update: Crude, NatGas, Metals, Stocks, Cocoa | Larry Williams

Crude Oil

Larry Williams identifies a setup for potential decline, noting that commercials (via Commitments of Traders (COT) Report red line in the chart below) have ceased aggressive buying and are exiting the market, with the line declining after marking a recent bottom.

The public (green line) has become heavy buyers, signaling vulnerability. His proprietary valuation indicator (gold line, based on Crude-Gold Ratio) shows overvaluation, similar to prior pullbacks. As a conditional trader, he views this as a setup but requires trend change confirmation.

Downward setup via overvaluation and commercial selling; imminent cyclical

downturn, low in March/June needing trend confirmation for shorts.

Cyclically (weekly charts), a downturn is imminent, with a low expected in about three months (around March or June), historically good for longs. He advises watching for sell signals in energy markets, emphasizing cycles for bias and timing.

Natural Gas

Williams was seeking a short-term buy opportunity but canceled orders due to lack of upward movement today, anticipating a possible bounce. He stresses evaluating the COT report to determine if commercials or the public are buying, cross-referenced with open interest for directional insight. While acknowledging a seasonal pattern, he deems it less significant than current buyer/seller dynamics via the COT.

Gold

Williams admits a prior bad call, expecting a cyclical high aligned with Bitcoin's peak, but Gold held firm. Currently, commercials (COT red line) are unusually buying the decline at high levels, a position not typical and reminiscent of past buy opportunities. He notes recent shorts in Silver and Copper have shifted.

Gold bullish from commercial decline-buys and March cycles;

Silver similar with rally soon, upside late Feb/March on trend change.

Cyclically, short-term (red) and longer-term (blue) cycles converge in March, establishing a substantive buy point without implying a drop to chart lows. This timeframe warrants bullish attention, pending trend change.

Silver

Williams observes that Silver exhibits strong similarities to Gold, historically regarded as the "poor man's gold" but now akin to the "expensive man's gold." It follows a comparable cyclical pattern, indicating the onset of a rally within the ensuing couple of weeks from the time of discussion. Aligning with his year-end forecast, he anticipated initial downward pressure, followed by an upward shift around late February or early March. He emphasizes restraint in entry, requiring confirmation of an upside trend change—such as a trend line breakout or moving average signal—within that timeframe to qualify the trade.

Dow Jones, S&P 500, Disparity in Advance/Decline, and Why Dow is Stronger

Williams affirms a bull market persisting through 2025 into mid-2027, dismissing pessimists based on repeated past errors. The advance-decline line (net cumulative advances vs. declines) is at new highs while stocks are not—an anomaly he has rarely seen, historically followed by higher prices, providing a fundamental bullish rationale.

Bull to mid-2027 via advance-decline highs; Dow stronger than

S&P on value focus, mid-March cyclical buy/rally.

Comparing charts below: Dow Jones futures show a higher low and greater strength than S&P E-minis, attributed to fewer "hot stocks" like the Magnificent Seven in the Dow, which suffered hits.

The Dow better represents quality and value, with funds shifting there for protection over speculation. As a trader, Williams is long Dow contracts, not S&P, due to Dow's outperformance.

Cocoa

Williams sees a buy setup, though not yet long, awaiting trend change. Commercials (top pane red line) are adding positions amid declining total open interest (black line)—indicating others exit, a rare bullish "bubble up." Valuation (gold line, Cocoa-Gold Ratio) shows undervaluation, contrasting prior overvalued tops.

Rally from commercial "bubble up" buys and undervaluation;

short-term immediate, major in June/July with trend entry patience.

Cyclically, short-term (red) suggests immediate rally start; longer-term (blue) aligns with short-term around June/July for ideal entry and bigger move.

Reference:
NinjaTrader Live (February 18, 2026) - 2026 Market Outlook with Larry Williams. (video)

Monday, December 29, 2025

2026 Midterm Election Year Seasonal Patterns of US Indices | Jeff Hirsch

Within the four-year presidential cycle, the midterm year represents the weakest phase for equities. It is characterized by low single-digit average returns and the cycle's deepest intra-year pullbacks. However, it also sets the stage for the most reliable and profitable recovery rallies, which typically extend well into the following year. Historical data on years ending in "6," dating back to 1806, show that 85% closed higher, with only four instances of declines. Hurst cycles project 9-month troughs for January and October 2026 (as illustrated in the charts at the end of this article).

Midterm Election Year Seasonal Pattern.

The first chart above shows the average seasonal performance of the DJIA (blue), S&P 500 (black), NASDAQ (green), and Russell 2000 (grey) from 1949 to 2024. All follow a consistent trajectory: a period of weakness from January through September, with average cumulative declines of 2–8%, followed by a fourth-quarter recovery that pushes annual returns toward positive territory.

6th Years of President Term Seasonal Pattern (1949-2024).

6th Year of 10-year Cycle Seasonal Pattern (1949-2024).

2026 Scenarios.

The Dow Jones Industrial Average could easily rally almost 50% from the 2026 low to the high of 2027. On average it does. Data spanning back to 1914 reveals that the Dow Jones Industrial Average sees an average climb of 46.3% from its lowest point in a midterm year to its peak in the ensuing pre-election year. To put that growth into perspective with current market values, a jump of that size would be comparable to the index rising from 40,000 to nearly 60,000.

The next chart focuses on the S&P 500, comparing the broader midterm average (blue) against the sixth year of a presidency (red), second-term Republican midterms (green), and Jeffrey A. Hirsch's Stock Trader’s Almanac aggregate cycle (black). Across all categories, early-year gains eventually yield to mid-year volatility, and a strong rally consistently emerges from October onward.

S&P 500 Midterm Election Year Seasonal Pattern, 1949-2024.

The second-term Republican midterm cycle (green) begins with a minor January dip, followed by a steady ascent that peaks at roughly 6-8% by April-June. After third-quarter volatility—where gains typically compress to a 1% floor in September—the market enters a year-end rally exceeding 8% by December.

Gold, Midterm Year Seasonal Pattern (1975-2024).

Silver, Midterm Year Seasonal Pattern (1973-2024).

Copper, Midterm Year Seasonal Pattern (1973-2024).

Crude Oil, Midterm Year Seasonal Pattern (1984-2024).

Natural Gas, Midterm Year Seasonal Pattern (1991-2024).

Reference:

Jeffrey A. Hirsch (December 23, 2025) - 2026 Market Forecast & Outlook: 6th Year of Presidency (webinar).

Performance of the S&P 500 during the Presidential Cycle:
Midterm Years see both the largest pullbacks, and the best recovery rallies.

S&P 500 Peak-to-Trough Declines in Midterm Election Years, 1950-2022.

The table above outlines every S&P 500 peak-to-trough decline during midterm election years between 1950 and 2022. These declines averaged 17.3% over 115 calendar days, typically beginning in late April and finding a floor by mid-August. However, all of these declines consistently acted as springboards, fueling recovery rallies that averaged 31.7% gains one year later.

» In the VI years there is a noticeable tendency to form a saddle.
February or March is without exception higher than some subsequent
month between May and August inclusive; but also without exception
November is higher than March. «

Edgar Lawrence Smith (1939) - Tides in the Affairs of Men:

An Approach to the Appraisal of Economic Change.

2026 in the Four-Year Presidential Cycle aligned with the Decennial Cycle.

J.M. Hurst's 18-Month Cyclic Model: Component cycles

and the aggregated Composite Cycle (thick black line).

While the ideal period for Hurst’s nominal 40-week cycle (also known as the 9-month cycle) is 272 days (38.86 weeks), current data from TimeSeriesSCC and Sentient Trader indicate a shorter realized average in the S&P 500 and NASDAQ. Over the last ten iterations, the measured 40-week cycle has averaged 257 to 262 days (36.7 to 37.4 weeks).

Projecting this duration forward from the major troughs of April 7 and April 21, 2025, the next 40-week cycle trough was initially expected to occur in a window between December 20, 2025, and January 8, 2026. However, considering the recent 80-, 40-, and 20-day troughs—including those from the DJI, NDX, ASX, DAX, NIFTY, and BTCUSD—shifts the projected window toward mid-late-January.