On the Full Signal podcast from October 1, 2026, Jeff Hirsch, editor of the Stock Trader’s Almanac, spoke with host Phil Rosen about historical market cycles, midterm positioning, structural AI drivers, and actionable portfolio strategies.
Presidential Cycle 2025–2028: Midterm Sweet Spot expected rally target window:
September 30, 2026 – July 19, 2027.
Presidential Cycles & The Midterm Sweet Spot
Midterm election years historically rank as the presidential cycle's weakest due to early-term policy friction and political uncertainty that drive a Q2–Q3 soft patch. By early October, markets transition into the cycle's most bullish window: the "midterm sweet spot" running from Q4 through pre-election Q2. Since 1949, this three-quarter stretch averages gains of +19% for the Dow, +20% for the S&P 500, and +29–30% for the Nasdaq, with midterm Octobers frequently marking the exact pivot bottom.The AI Super Boom & Market Fundamentals
This cyclical tailwind merges with a secular "AI super boom" comparable to post-war industrialization or the early internet era. Driven by massive hyperscaler capital expenditure and robust semiconductor earnings, this fundamental expansion supports high valuations into 2027 and overrides traditional cyclical drags. Historical super booms prove that staying invested through temporary volatility is essential when liquidity and structural drivers hold, despite short-term risks from extreme mega-cap tech concentration.
Macro Strategy: Yields, Politics & Small Caps
Near 5% bond yields increase equity opportunity costs, but strong AI earnings power and presidential cycle tailwinds dominate asset allocation. Hirsch is rotating from fixed income into lagging small caps, which offer relative value, broadening market participation into 2027, and seasonal drivers like the January Effect. Preferred sectors include transports, selective industrials, stabilizing financials, and core AI infrastructure, while post-midterm political gridlock adds market-friendly policy stability.Technical Timing & Seasonality Execution
Rather than relying on strict calendar dates, seasonal strategies require technical filters. For the "Best Six Months" strategy (November–April for broad markets; extended through June for Nasdaq), a confirmed positive MACD crossover on major averages on or after early October triggers the buy signal, while negative April/June crossovers signal exits. Institutional tax cycles, calendar flows, and psychology maintain seasonal edges, but MACD confirmation prevents false starts.Jeff Hirsch uses MACD crossovers as a technical filter to execute the "Best Six Months" strategy. By combining technical momentum with the calendar, he avoids buying into falling markets or exiting strong spring rallies prematurely.
► Timing Windows: The "Best Six Months" run Nov 1–Apr 30 for the Dow/S&P 500, extending through June for Nasdaq. Daily monitoring begins October 1 for buys and April 1 (June 1 for Nasdaq) for exits.
► Indicator Setup: Daily charts with 12-day fast EMA, 26-day slow EMA, and a 9-day signal line.Buy Signal: On/after Oct 1, a positive MACD crossover (12-day EMA crosses above 26-day EMA) triggers the Seasonal Buy Signal, confirming downside momentum has ended before entering equities.
► Sell Signal: On/after Apr 1 (or Jun 1 for Nasdaq), a negative MACD crossover triggers the Seasonal Sell Signal, shifting exposure to cash or defensive sectors.
► Why It Works: It eliminates buying into October market crashes, captures extended spring upside, and reduces drawdowns compared to strict calendar dates or buy-and-hold strategies.
Bearish Risks & Defensive Rules
Key risks to the base case include policy missteps, re-accelerating inflation, labor deterioration, geopolitical shocks, or an AI earnings reset. Shifting bearish entails tactical risk management—tightening stops and trimming laggards—rather than full liquidation, maintaining flexibility if macro trends or technicals break down.
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