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 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.
 

 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.

 

 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.

 

 

 Blancmange Curve.

 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).

See also: 
Larry Wiliams (December 23, 2025) - 2026 Market Forecast: Cycles, Risks, and Opportunities.

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

Jeffrey A. Hirsch (2011) - S&P 500 Projection Chart from 2009 to 2025.

Upcoming 40-Day Hurst Cycle Troughs: SPX, NDX, Crude Oil, Gold, Bitcoin

S&P 500 (daily bars): 40-day cycle trough ideally due December 23 (Tue)(± 5.49 CD). 

While the 20-week, 40-week, and 18-month cycles all remain in decline, a choppy counter-trend Santa Claus rally of uncertain

magnitude is expected into year-end early-January 2026 (see 'Schematic Structure of Hurst's Nominal 40-Day Cycle' below). 

Next 80-day, 40-week, and 18-month troughs are currently projected to around January 25 (Mon), 2026. 

[Actual average lengths of the nominal 20-day, 40-day, 80-day, 20-week, and higher-order cycles of

each instrument are indicated in the stacked, color-coded boxes at the bottom right of the charts.] 

 

 Schematic Structure of Hurst's Nominal 40-Day Cycle.

 

DJIA / CPI (daily bars): Long-Term Cycles (1940-2025).

 

 NASDAQ (daily bars): Long-Term Cycles (2000-2025).

 

 NASDAQ (daily bars): 40-day cycle trough due ± December 23 (Tue). 

Next 80-day, 40-week, and 18-month cycles troughs are currently projected to around January 25 (Mon), 2026.  

 

 Crude Oil (WTI, daily bars): Long-Term Cycles (2000-2025).

 

 Crude Oil (WTI, daily bars): Current 18-Month Cycle (October 2024-December 2025).

 

Crude Oil (WTI, daily bars): 80-day cycle trough due ± December 19-21 (Fri-Sun). One more 80-day cycle into a 18-month

cycle trough: Next 40-week and 18-month cycles troughs are currently projected to around February 17 (Tue), 2026.  

 

 Gold (daily bars): Long-Term Cycles (1995-2025).

 

 Gold (daily bars): 80-day cycle trough due ± December 28 (Sun) and January 5 (Mon), 2026. 

One more 80-day cycle into a 18-month cycle trough: Next 40-week and 18-month cycle troughs 

are currently projected to around late February-mid March 2026. 

 

 Bitcoin (daily bars, log-scale): Long-Term Cycles (2010-2025).

 

 Bitcoin (daily bars): 40-day cycle trough due ± December 20 (Sat).

Next 80-day, 40-week, and 18-month cycles troughs are currently projected to around January 19 (Mon), 2026. 

[Cycle Analysis as of December 18, 2025 | 11:00 a.m. EST] 

 

See also:

David Hickson (December 15, 2025) - Hurst Cycles Market Update and Outlook into Early 2026.

Jack Gillen (December 1, 2025) - The Year-End Rally and January Effect in US Stocks.

Cyclic Vibrations Consultancy - TimeSeriesSCC Analytical Software.

  

Principles of Commonality and Variation.

Hurst Cycles Market Update and Outlook into Early 2026 | David Hickson

This is our final market update for the year, reviewing our usual set of instruments (SPX, NDX, ASX, DAX, NIFTY, Gold, BTCUSD) and outlining what to expect as we move into 2026.

 

S&P 500: The S&P 500 is advancing out of a November 21 trough that is definitively an 80-day cycle low and remains a viable candidate for a completed 40-week cycle trough. This advance is occurring within the larger context of an April 2025 trough phased as at least an 18-month cycle low, which continues to dominate the intermediate trend. Price behavior has been consistently bullish: clean crossings above the 20-day FLD, achievement of FLD targets, and successful defense of the 20-day FLD during the most recent 20-day trough (Dec 10). No bearish structural behavior has emerged to invalidate the 40-week trough interpretation.

 

 Actual average lengths of the nominal 20-day, 40-day, 80-day, 20-week, and higher-order cycles of

each instrument are indicated in the stacked, color-coded boxes at the bottom right of the charts. 

 

A 40-day cycle trough is expected into late December (± Dec 26-29), likely producing a shallow pullback. This should be followed by another advance before a larger corrective phase into an 80-day or 40-week trough in late January or early February (± Jan 30-Feb 6). Unless bearish confirmation appears, that trough is expected to be corrective rather than trend-ending, with the larger structure remaining bullish.

 

NASDAQ: The NASDAQ shares the same broad cycle architecture as the S&P 500, with a confirmed 80-day trough on November 21 and the unresolved question of whether the 40-week trough is already in place or still ahead. However, relative weakness is evident: price has struggled to remain above the 20-day FLD, and short-term momentum is softer. The orange dashed composite model line reflects this by projecting a deeper decline into the next larger trough compared with the S&P 500.

 

A 40-day trough is expected near year-end or early January, followed by a decline into an 80-day trough in late January or early February. If downside pressure increases meaningfully, that later trough may resolve as the 40-week cycle low. Synchronization with the S&P 500 remains the dominant expectation.

 

Australian ASX: The ASX also shows a November 21 trough that could be either an 80-day or a 40-week cycle low, but unlike U.S. indices, price action has failed to confirm bullish intent. The market crossed above the 20-day FLD but did not achieve its projected upside target, and subsequent price action has been weak. While the 20-day trough found approximate FLD support, the amplitude and momentum are noticeably inferior, introducing bearish risk.

 

A 40-day trough is expected into late December, followed by a more important trough in late January or early February. Given current behavior, the probability is increasing that this later trough resolves as a 40-week cycle low. A decisive bearish turn in the ASX would materially strengthen the global commonality case for a synchronized 40-week trough.

 

German DAX: The DAX cycle labeling is less precise, but price action provides important guidance. The November 21 low has been phased as a 40-day trough but sits close to the projected positions of the 20-week and 40-week cycles. Despite analytical ambiguity, price crossed above the 20-day FLD, achieved its target, and remains above short-term support—behavior more consistent with a market that has already completed a larger-degree trough.

 

A pullback into a late-December 40-day trough is expected, with another due toward late January. Unless price begins to display clear bearish characteristics, the evidence favors the interpretation that the 40-week trough formed in November, implying that forthcoming declines should remain corrective.

 

Indian NIFTY: The NIFTY exhibits one of the clearest cycle structures. A 20-week trough occurred in early August, followed by an 80-day trough in early November. Recent price action suggests a 40-day trough has just formed near the projected centers of both the 20-week and 40-week cycles, raising the possibility that the larger cycle trough has already occurred. The current advance is consistent with a market rebounding from a significant cycle low.

 

Price is expected to cross and hold above the 20-day FLD and achieve its upside target. If the 40-week trough is already in place, the coming weeks should remain upward-biased. Risk only increases if the advance fails and the cycle structure shifts into a bearish-shaped configuration toward year-end.

 

Gold: Gold is operating within a structurally bullish environment despite uncertainty surrounding a possible 54-month cycle peak in October. Price action since that peak has challenged its validity, suggesting either that the peak was misidentified or that longer-degree bullish cycles (9-year, 18-year) are overwhelming it. Trough behavior has been exemplary, with repeated successful interactions with the 20-day FLD, including support during the most recent 40-day trough.

 

Gold is likely to retest or exceed the October highs before encountering its next significant corrective phase. The next major timing window is the 20-week cycle trough expected in the third week of January, which should be monitored closely for trend continuation or structural change.

 

Bitcoin: Bitcoin’s November 21 low is currently labeled as an 80-day trough, but it remains a candidate for a larger 18-month cycle trough. Unlike equities, Bitcoin has not displayed strong post-trough bullish expansion. Price has struggled to hold above the 20-day FLD, and recent action shows mild bearish leakage below it, keeping the larger trough question unresolved.

 

Focus is now on the development of the next 40-day cycle trough. Continued weakness would increase the likelihood that the true 18-month trough still lies ahead. Until stronger bullish confirmation appears, Bitcoin should be treated as structurally uncertain rather than trend-confirmed.

 

Reference:

David Hickson (December 15, 2025) - Hurst Cycles Market Update: What's Coming in 2026. (video)

 

See also:

Ahmed Farghaly (December 3, 2025) - S&P 500 Now Declining into 18-Month Hurst Cycle Low.

December Post-Election Year Seasonality of US Stock Markets | Jeff Hirsch

December trading is traditionally shaped by holiday sentiment, with a general buying bias, though early-month markets can be choppy due to tax-loss selling and year-end adjustments. Historically, the first trading day of December has been bearish for the DJIA, S&P 500, NASDAQ, and Russell 1000 over the past 21 years, with the Russell 2000 seeing even sharper declines.

Choppy First Half, Then Year-End Rally.

 

The first half of December is typically choppy, with early gains often fading into mid-month. Then holiday tailwinds usually begin to dominate, lifting the major indexes. A brief consolidation in the Santa Claus rally around December 25 is common, even as the market continues to push toward higher prices into year-end.

 

Reference: 

Jeffrey A. Hirsch (November 25, 2025) - Typical December — Choppy First Half Then Yearend Rally.

November Post-Election Year Seasonality: Best Month of the Year | Jeff Hirsch

November is typically a bullish month, with twelve bullish days based on the S&P 500. This includes a streak of six consecutive bullish days starting on the first trading day (Nov 3 (Mon)). Although historically a bullish month, November does have its weak points.

November Performance of US Stock Indices: Last 21-Years (2004-2024) and Post-Election Years (1950-2021).

The DJIA and Russell 2000 tend to exhibit the greatest strength at the beginning and end of the month. The Russell 2000, in particular, is notably bearish on its 12th trading day (Nov 18 (Tue)); the small-cap benchmark has risen just eleven times in the past 41 years (since 1984). On this day, the Russell 2000's average decline is 0.41%.

Recent weakness around Thanksgiving (Nov 27 (Thu)) has shifted the strength of the DJIA and S&P 500 to align more closely with that of the NASDAQ and Russell 2000, with the majority of bullish days occurring at the start and end of the month. The best way to trade around Thanksgiving is to go long on any weakness before the holiday and exit into strength just before or after.
 

Reference: 

Jeffrey A. Hirsch (October 30, 2025) - November Best Month of the Year for DJIA & S&P 500.

 

Post-Election Year most bullish in 4-Year Presidential Cycle since 1985.

 

S&P 500 Average Daily Performance and Hit Rate (%) (1928-2024). 

 

S&P 500 Seasonailty First and Last Half of each Month (1928-2024). 

 

S&P 500: We are now in the final phase of this rally. 

 

SPX ES-minis: Down (= 80D peak?).

  

 Gold: 80-day cycle trough zone. Up Reversal?

 

Bitcoin: Heading towards the next 80-day cycle trough. Down.

 

See also:

Larry Williams (September 25, 2025) - US Stock Market Outlook for Q4 2025.