BofA's Hartnett Bull & Bear Indicator Hits 9.7—Extreme Greed Signals Sell

On August 5 (Wed), BofA's Hartnett Bull & Bear Indicator hit 9.7, up from 9.4 and its highest level since 2021—a strong contrarian sell signal for risk assets (banks, industrials, semis/tech). 

 

The indicator aggregates positioning (hedge funds and long-only managers), equity/bond flows, global equity breadth, and tight credit spreads. Historically, readings over 8 have preceded modest average equity declines of 2-3% over 1-3 months (around 60% hit rate), with occasional larger drawdowns, prompting BofA to recommend rotating toward defensives (stable, less cyclical sectors like consumer staples and often utilities/healthcare).

 

See also:

Namzes (August 8, 2026) - All Eyes on OpEx: Volatility Ready to Break Out.

TPR (August 6, 2026) - S&P 500 Hits New ATH as Smart Money Starts Bailing.

All Eyes on OpEx: Volatility Ready to Break Out | Namzes

The VIX 80-day cycle low is expected within the next few days. August 5 marked day 68, which is slightly early but still within range. The 40-day cycle, shown in the bottom panel, reflects a 2:1 harmonic ratio relative to the 80-day cycle. August options expiration (OpEx, Friday, August 21) should be watched as a potential window for a volatility breakout. Volatility is likely to rise into October, where the next key low in the S&P 500 may form.

Top panel: VIX price + 80-day cycle. Middle: Seasonality/trend + dated cycle lows. Bottom: 40-day cycle oscillator.

The S&P 500's 20-week cycle low likely occurred on July 29 (Wed), with 7,313 now serving as a key daily pivot for any downside. As the VIX cycle approaches its low in the coming days, it is important to monitor the VIX term structure, which is currently reaching extreme contango levels, indicating that 30-day volatility is significantly lower than 3-month volatility. When this ratio approaches and clusters around 0.80, it signals market complacency and often precedes pullbacks in equities.

VIX/VIX3M ratio vs. S&P 500.

 

The VIX/VIX3M ratio, shown inverted in the lower panel for easier comparison against the S&P 500 (in gold), highlights these 0.80 readings. When combined with extreme dispersion and a rapidly declining put/call ratio this week, these conditions point to increasing volatility, which is expected to spike in the second half of August.

Reference:
Namzes (August 5 and 7) - Volatility Set to Ignite: Complacency Signals August Breakout.
 

See also:

Namzes (July 27, 2026) - 20-Week Hurst Cycle Low Due in SPX QQQ SOX SMH.
TPR (August 6, 2026) - S&P 500 Hits New ATH as Smart Money Starts Bailing.

S&P 500 Hits New ATH as Smart Money Starts Bailing

With the S&P 500 reaching a new all-time high in early August 2026, a pronounced contrarian bearish divergence has emerged among market participants. Retail "Dumb Money" Confidence (red line in the chart below) has surged from neutral into optimistic territory at 0.61, while institutional "Smart Money" Confidence (blue line) has dropped into pessimistic territory at 0.31. 

 

Retail sentiment tilts euphoric while institutional positioning turns defensive.

CNN's Fear & Greed Index signals rising greed, though not yet at extremes. 

 

Historically, the most dangerous periods for stocks are when dumb money is high and smart money is low at the same time the index is elevated. It does not mean an immediate crash is guaranteed, but it raises the odds of a meaningful pullback or at least a period of weaker returns ahead. 

 

An alternative experimental S&P 500 composite cycle

projection points to a mid-October major low.

However, having likely printed a nominal 20-week Hurst cycle low on June 30 (17.29 weeks / 121 CD off the late-March 40-week trough), the S&P remains in the rising phase of its second 20-week sub-cycle—part of a broader 40-week (9-month) and 18-month structure targeting a major low in late November (± 8 weeks).

 

Static projection based on the latest 20-week cycle period (17.29 weeks / 121 CD).

 

However, having likely printed a nominal 20-week Hurst cycle low on June 30 (17.29 weeks / 121 CD off the late-March 40-week trough), the S&P remains in the rising phase of its second 20-week sub-cycle—part of a broader 40-week (9-month) and 18-month structure targeting a major low in late November (± 8 weeks).

 
The current rise suggests to extend into early September—interrupted by the 5- and 10-day cycle higher lows of August 5–6 (Wed-Thu) and August 11–12 (Tue-Wed) and a 20-day cycle low around August 24 -28 (Mon-fri)—before yielding a late-September 80-day (10-week) cycle trough. A secondary rally into mid-October—capped below the September peak—is then likely to trigger the final decline into the primary 40-week and 18-month cycle trough in November.

 

Total Solar Eclipse on August 12.

 

Key Turning Dates of the Solar Cycle vs. the DJIA.

 

Q1 rally, mid-year correction, July and October windows for yearly low, rally in Q4.  

Average S&P 500 total-return path (indexed to 100 on midterm Election Day) for all midterm years since 1970 (1970–2022), spanning roughly ±6 months. X-axis centers on Election Day (first Tuesday in November); y-axis tracks cumulative total return. The average line rises in the final ~22 trading days before the election (= October 2, 2026) and continues higher afterward (+14.1% average in the following six months). A separate “Lost Control” series (party loses presidential trifecta) lags the broader average post-election (+10.4% vs. +16.1%).

See also: 

Nicholas D. Savino (August 2, 2026) - S&P 500 Forecast for August 2026.

Jeff Hirsch (July 25, 2026) - August Stock Market Performance in Midterm Election Years.

Seth Golden (July 28, 2026) - Presidential Cycle Sweet Spot: Post-Midterm Election Gains.

 Jack Gillen (1979) - Important Solar and Lunar Degrees for Trading US Stock Indices.

S&P 500 Forecast for August 2026 | Nicholas D. Savino

Here is the S&P 500 August 2026 Forecast. Also posted is the inverse below. The charts are not scaled for Price. 

 

Primary forecast pattern for August.
 

Inverse pattern for August; currently not favored.  
 

How the July Forecast played out.

Reference:
Nicholas D. Savino (August 2, 2026) - S&P 500 Forecast for August 2026.
[check for updates]

See also:
Jeff Hirsch (July 25, 2026) - August Stock Market Performance in Midterm Election Years.

Seth Golden (July 28, 2026) - Presidential Cycle Sweet Spot: Post-Midterm Election Gains.

The Turn-of-the-Month Effect: A Century of Empirical Evidence

The turn-of-the-month (TOM) stock market anomaly, where returns cluster heavily around month-end and early-month trading days, is validated by academic literature. Analyzing Dow Jones data from 1910 to the present using a relative trading day counter that excludes weekends and holidays reveals that while mid-month returns remain weak or negative, performance surges dramatically from the second-to-last trading day (day -2) through the fourth trading day (day +4) of the new month. 

 The TOM anomaly (-2 to +4 trading days) has delivered persistent outperformance

versus buy-and-hold with lower drawdowns across 116 years of Dow data.  

 

Segmenting this 116-year history into three 40-year periods (1910–1950, 1950–1990, and 1990–present) confirms consistent TOM outperformance across all regimes, despite a post-1990 dip on the final trading day skewed by rare macro anomalies like 9/11 and the 2008 financial crisis. A systematic strategy trading this -2 to +4 window historically outperformed traditional buy-and-hold, generating higher profits with lower drawdowns during the 1929 crash, multi-decade sideways markets, the dot-com bust, and the 2022 bear market, showing historical flat periods often precede strong resurgences. The strategy's second-largest drawdown occurred in 2008, supporting the outlier theory. 

 

Hypothesized causes like recurring automated capital flows (salaries/retirement) and institutional rebalancing remain unproven, as trading volumes do not spike and automated systems did not exist in 1910. Lacking a definitive causal consensus, the TOM effect persists either as a structural confluence or an unexplained anomaly. 

 

See also:
Unger Academy USA (2019) - Trading Strategies: End Of Month Rally. (video)

20-Week Hurst Cycle Low Due in SPX QQQ SOX SMH | Namzes

The last 80-day cycle bottomed on time (June 10). Semiconductor stocks (SOX/SMH) made marginal new all-time highs, while the broader indices—the S&P 500 (SPX) and Nasdaq 100 (QQQ)—remained slightly below theirs.

PHLX Semiconductor Index (SOX).

We are now due for a 20-week cycle low. July 17 marked day 109 and last Friday day 116, so a low may already be in, though it’s early to confirm. Alternatively, if this was only a 40-day low, the current 20-week cycle could extend into a late-August bottom. This would be the fourth bullish cycle in a row, increasing the likelihood that the next cycle is left-translated (bearish).

The subsequent 20-week low, following the August trough, is projected for late October, aligning with seasonal weakness and potentially offering a significant buying opportunity (see the April 2025 SOX projection).  A 3.5-year cycle (Kitchin Cycle) low is still expected ahead, but no major liquidation has occurred yet and models have not issued a sell signal. Market breadth remains acceptable; however, leadership—particularly in technology and semiconductors—is weakening, while defensive rotation is increasing, both of which are cautionary signals.

Using Hurst cycle analysis, the semiconductor ETF (SMH) is entering the 10-week FLD (Future Line of Demarcation). In a strong uptrend, this level typically acts as support; a break below would imply lower projections toward the 200-day moving average (200 DMA) and Q1 highs. For now, this remains a preliminary, low-confidence projection.

PHLX Semiconductor Index (SOX).

The current 40-day cycle should continue rising for a few more trading days. The next 40-day low in August will help determine whether the new 20-week cycle is bullish or bearish. A bearish outcome would show early failure, indicating left translation.

VanEck Semiconductor ETF (SMH).

We are in a short-term downtrend, with the 50-day moving average (50 DMA) acting as a pivot near 600 on SMH. Above it, 620 is the key resistance level.

VanEck Semiconductor ETF (SMH).

 

Failure at 600 would open the path to liquidation toward Q1 highs, filling gaps below and repairing weak structure, including the large volume void between 420 and 537 (which includes the July 17 low).

 

Reference:
Namzes (July 27, 2026) - Hurst Cycles: 20W Low Due Across SPX QQQ SOX SMH.
 

See also:

Namzes (June 28, 2026) - Oil Outlook 2026: Navigating the Upcoming 40-Week Cycle Low.
Namzes (April 17, 2026) - S&P 500 Bear Outlook Intact: Q3 3.5-Year Hurst Cycle Low.

Jeffrey A. Hirsch (July 25, 2026) - August Stock Market Performance in Midterm Election Years.
Sergey Tarassov (July 14, 2026) - Kitchin Cycle Signals S&P 500 Rise Into Late 2026.

 

Hurst Cycle Troughs and Peaks (November 2025 through July 24, 2026).

 

» The current 20-week cycle could extend into a late-August bottom. « 

Forward Cycle Projection through late 2026-early-2027.

August Stock Market Performance in Midterm Election Years | Jeff Hirsch

The chart isolates August performance across Trump's first term (2017–2020), 2025, and the 2018 midterm. Returns have exceeded August's bearish reputation, but the structure persists: early weakness, late strength.

 

Early-month weakness, stronger second half: On average, the Nasdaq closed up nearly 6%.

Lows on August 13 (Thu) and August 17 (Mon), followed by a near 3% DJIA rally into month-end.

 

Trump-era policy shocks have repeatedly triggered selloffs that quickly reversed into "TACO Trade" rallies. This cycle differs—tensions with Iran appear less susceptible to rapid de-escalation. Seasonality is supportive, but elevated valuations, geopolitical risk, and macro fragility increase the odds that August 2026 diverges from precedent.
 

Reference:

Jeffrey A. Hirsch (July 25, 2026) - Can Trump Defy August’s Bearish Reputation Again?

 

S&P 500 2026 vs. best-correlated year: 2007 (84%).  

 

SOX, Nasdaq, and S&P 500 Annual Seasonal Patterns 1995-2025.

August Stock Market Performance 2001-2021.

See also:

Jeffrey A. Hirsch (June 25, 2026) - July Stock Market Performance in Midterm Election Years.  

Sergey Tarassov (July 14, 2026) - Kitchin Cycle Signals S&P 500 Rise Into Late 2026.

Jack Gillen (1979) - Important Solar and Lunar Degrees for Trading US Stock Indices.

July OpEx Since 1990: Friday –0.35%, Then Stabilization | Jeff Hirsch

Since 1990, July options expiration has been choppy, with the weakest performance on expiration Friday: DJIA and S&P 500 average –0.35%, NASDAQ –0.44%, and all three decline about two-thirds of the time. 

Expiration week is mixed—DJIA +0.38% (58.3% positive), S&P 500 ~flat (–0.04%), NASDAQ –0.13%. The following week stabilizes modestly (DJIA +0.15%, S&P 500 +0.09%); NASDAQ averages –0.17% but rises in 52.8% of years, skewed by a few large drops. Overall, July expiration tends to create brief downside pressure that fades as focus returns to earnings and fundamentals.

Reference:
Jeffrey A. Hirsch (July 14, 2026) - July Monthly Option Expiration: Weakest Friday, Modestly Better Following Week.

 

See also:

Jeffrey A. Hirsch (June 25, 2026) - July Stock Market Performance in Midterm Election Years. 

Christopher Grafton (July 13, 2026) - S&P 500 Update: 80-Day Cycle Peak by Late-July. 

Nicholas D. Savino (June 30, 2026) - S&P 500 Forecast for July 2026.

André Barbault's Cyclic Index and S&P 500 Behavior | Sergey Tarassov

André Barbault's Index of Cyclical Variations or Cyclic Index measures the balance between waxing and waning angular separations among planets, analogous to lunar phases—where increasing (waxing) angles are associated with more optimistic conditions and decreasing (waning) angles with more pessimistic conditions. The same principle is extended across all planetary angles, with heliocentric configurations preferred.

  

Heliocentric Cyclic Index vs. S&P 500.

Statistical analysis indicates that this index accounts for approximately 6.4% of S&P 500 price variation, representing a modest but notable explanatory contribution for a single indicator. Recent periods show that the index has maintained a consistent relationship with market movements. Further refinement, including the use of neural network methods, may enhance its ability to model optimistic and pessimistic market regimes.

Reference:
Sergey Tarassov (June 22, 2026) - Index of Cyclical Variations and S&P 500 Behavior.

Kitchin Cycle Signals S&P 500 Rise Into Late 2026 | Sergey Tarassov

Sergey Tarassov's Timing Solution charts correlate the S&P 500 with harmonics of the 41-month Kitchin cycle (currently averaging 1,267.7 days, or 3.473 years).

 

 Note: Based on daily closes, the plotted waves are band-pass–filtered components centered on the target periodicity

(Kitchin range) and subsequently smoothed via averaging/Fourier/digital filtering, suppressing high-frequency noise

and yielding a clean sinusoidal form. Accordingly, they lack utility for day trading or short-term execution.  

The cycle projections (green, blue, and magenta lines) for 2026 in the first chart suggest that the current sideways-to-down phase in the S&P 500 concludes by mid-late-July, followed by a strong projected surge into year-end, then a decline or retracement into Q1–early Q2 2027, and a renewed rise into Q1 2028.

The pink-shaded chart background marks the out-of-sample projection of the S&P through 2028.

  

The long-term chart (2021–2028) indicates an upward trajectory in the S&P 500’s Kitchin cycle into late 2026, followed by a sharp correction in Q1 2027 and a continued rise extending through 2027–2028.

  

Reference:

Sergey Tarassov (July 11, 2026) - Kitchin Cycle and S&P 500.

See also:

Sergey Tarassov (2024) - Kitchin Cycle Suggests DJIA Decline Until End of 2025.

Larry Williams (May 26, 2026) - The Next Bullish Wave May Be Starting. 

 

Cyclical Profiles of Kitchin (41-Month) and other Dominant Cycles across Assets and Sectors. 

 

Sergey Tarassov's table classifies each asset by its dominant cyclical drivers (e.g., Kitchin ~3–4y, Juglar ~9y, sunspot harmonics, Venus synodic, 7.8y Gold) and indicates which periodicities statistically dominate price behavior. The “Profile” column quantifies cycle influence, showing the proportion or confidence of a given cycle explaining variance (e.g., “Kitchin 100%” = primary driver). Overall, it’s a multi-cycle attribution framework used to build composite waveforms and time market turning points via overlapping periodic structures. "H" notation interpreted as harmonic components (e.g., 2H, 3H, 4H of Sunspot cycle). "Venus syn" → "Venus synodic" for clarity. Consistent cycle formatting: Cycle (length) where applicable. Ranges unified: e.g., 2H–4H instead of 2H 3H 4H. Missing profiles left blank (—) rather than inferred.

 

Key Cycle Periodicities. 

The second table standardizes all cycles of the first into approximate durations in days and years. Kitchin Cycle (~3.3y) ≈ Sunspot Cycle 3H (~3.7y) explains why they co-appear frequently in the dataset. Other key dominant drivers are: 5.5y (Sunspot 2H) → strongest macro-economic driver (confirmed in GDP note), 7.8y (Gold cycle) → dominant in FX + metals, and 9y (Juglar) → long equity + credit structure. Instruments with Kitchin + 3H Sunspot + Venus synodic (e.g., crypto, grains) tend to show high volatility clustering due to cycle interference.

S&P 500 Update: 80-Day Cycle Peak by Late-July | Christopher Grafton

General outlook: US Dollar Small Down (->80D trough). Gold Down (->20D trough). Oil Up (->20D peak). Copper Up (-> 80D peak). USDJPY Small Down (->80D trough). EURUSD Down (-> 20D trough). SPX E-minis Up (-> 80D peak). Nikkei futures Up (20D trough). Bitcoin Up (-> 20D peak). US Treasury Notes Up (20D trough).

  

S&P 500 E–Minis (ES) heading towards the next nominal 80-day cycle peak around late-July. Up.

 

US Dollar (DXY) close to an 80-day cycle trough. Small Down.

 

DXY is closing in on the next 80-day cycle trough. Price has just been rejected at the 20-day VTL, which likely marks the last 20-day cycle peak. Expecting minor pullback to the 40-day VTL and then further price expansion.

Bitcoin looking for the next 20-day cycle trough. Small Down.

 

In Bitcoin, the new 20-week cycle upswing is broadly driving price higher. We are looking for a soft pullback into the next 20-day cycle trough. 

Reference:
Christopher Grafton (July 13, 2026) - The Macro Brief - 13 July 2026.

See also:

Christopher Grafton (July 6, 2026) - The Macro Brief - 6 July 2026. 

Christopher Grafton (2022) - J.M. Hurst's Valid Trendlines (VTLs).
Christopher Grafton (2022) - J.M. Hurst's Future Lines of Demarcation (FLDs). 

Nicholas D. Savino (June 30, 2026) - S&P 500 Forecast for July 2026. 

Wayne Whaley (June 29, 2026) - 25-0 S&P 500 Setup for June 26 to July 15. 

David Hickson (June 29, 2026) - Hurst Cycles Update: SPX, NDX, ASX, Gold, and Bitcoin. 
Jeffrey A. Hirsch (June 25, 2026) - July Stock Market Performance in Midterm Election Years.

Record-Low Skew: Crash Insurance for Pennies Signals Top | Thierry Borgeat

The S&P put/call skew just collapsed to 0.71. Not a low. The lowest reading on record. The 10-year average is 12. The 2020 panic peaked at 34. We're at 0.71. What this measures: how much investors pay to protect against a crash versus betting on a rally. At 0.71, crash protection is essentially free. Nobody wants it.

The chart displays "S&P 500 Average Single Stock 1m Normalized Skew," a custom metric averaging 1-month normalized put-call skew across S&P 500 stocks, with the latest value at 0.71 (record low). History shows crashes follow low-fear periods as hedging fades. 

Think about what that means. After two years of gains, at record concentration, with households at record equity exposure, the options market has priced hedging like insurance on a house that cannot burn. History's lesson is consistent: markets don't crash when everyone fears a crash. Fear is the hedge. This chart says the hedge is gone. Nobody buys insurance at the top. That's what makes it the top?

 

Thierry Borgeat, July 6, 2026.

 

The skew signal is not always precisely timed,
but reliably foreshadows major trend changes.

S&P 500 Up into Mid-July 40-Day Cycle Peak | Christopher Grafton

General outlook: US Dollar Up (10D trough). Gold SmallUp (80D trough). Oil Pause (80D trough). Copper Up (-> 20D peak). USDJPY Up (80D trough). EURUSD SmallUp (80D trough). SPX E-minis Up (-> 40D peak). Nikkei futures Up (20D trough). Bitcoin Up (-> 20D peak). US Treasury Notes Up (-> 20D peak).

S&P 500 E–Minis (ES) - heading towards the next 40-day cycle peak. Up.

The 20-day cycle trough looks to have formed with the early June 80-day cycle upswing acting as a tailwind. We are looking for a move up into the next 40-day cycle peak.

Reference:
Christopher Grafton (July 6, 2026) - The Macro Brief - 6 July 2026.

See also:

Nicholas D. Savino (June 30, 2026) - S&P 500 Forecast for July 2026. 

Wayne Whaley (June 29, 2026) - 25-0 S&P 500 Setup for June 26 to July 15. 

David Hickson (June 29, 2026) - Hurst Cycles Update: SPX, NDX, ASX, Gold, and Bitcoin. 
Jeffrey A. Hirsch (June 25, 2026) - July Stock Market Performance in Midterm Election Years.

Margin Debt at Extremes Threatens Sharp Equity Selloff

The NYSE/FINRA margin debt chart quantifies the total capital investors borrow against their securities portfolios to finance additional equity purchases. It operates as a procyclical indicator of market tops, typically expanding aggressively in the late stages of bull markets. At present, margin debt is approximately 53.7% year-over-year, reaching an extreme level of roughly $1.42 trillion.

67-year NYSE/FINRA margin debt YoY: 53.7% at $1.42T; historical tops align with rate

rollovers—not peaks—preceding S&P 500 highs in 1972, 2000, 2007, and 2021.

Historically, major market peaks (1972, 2000, 2007, 2021) exhibit a consistent structure: a rapid acceleration in margin debt into an overheated zone, followed by a reversal and subsequent contraction. The critical signal is not the absolute peak in leverage, but the inflection point after a steep rise. This reversal closely aligns with the formation of tops in the S&P 500. During the expansion phase, equities continue to advance alongside rising leverage; it is the sharp decline in margin debt that typically precedes market weakness.

 

S&P 500 (daily bars): Bearish Diamond or Bullish Pennant. Immediate breakdown or continuation to the upside.

Currently, the S&P 500 is trading near all-time highs, while margin debt has re-entered overbought territory. A confirmed reversal has not yet occurred, but proximity to critical thresholds is evident. Historical patterns indicate that once levels above approximately 55% are approached or exceeded, the probability of a trend reversal increases materially. While additional short-term upside remains possible, the onset of a downturn in margin debt is typically followed by an accelerated decline in equity markets.

 

The underlying risk mechanism is driven by leverage. Declining asset prices simultaneously reduce the value of collateral and the leveraged positions financed by borrowed capital. This dynamic can trigger margin calls and forced liquidations, producing a cascading effect that amplifies downside volatility. Elevated margin debt therefore acts as a systemic amplifier of market stress during downturns.

 

From a tactical standpoint, current conditions favor reducing long exposure and maintaining a bias toward short positioning. Strategic capital deployment is deferred until the anticipated correction has fully developed within the defined target range, where a more favorable long-term risk-reward profile and substantial upside potential are expected to re-emerge.

 

Philip Hopf’s Elliott Wave analysis indicates the S&P 500 has entered its terminal top zone, with residual upside capped at approximately 10% toward the upper boundary near 8,310. Within this range, the formation of a major cyclical peak is expected. Subsequently, a significant correction is likely, estimated at approximately 37% to 47%, implying a downside range of roughly 4,700 to 3,900. 

 

Reference:

Tierry from Arvy (July 1, 2026) - The Chart That Keeps Me Awake at Night (Margin Debt).

 

See also:

Nicholas D. Savino (June 30, 2026) - S&P 500 Forecast for July 2026. 

Wayne Whaley (June 29, 2026) - 25-0 S&P 500 Setup for June 26 to July 15. 

David Hickson (June 29, 2026) - Hurst Cycles Update: SPX, NDX, ASX, Gold, and Bitcoin. 
Jeffrey A. Hirsch (June 25, 2026) - July Stock Market Performance in Midterm Election Years.