S&P 500 Now Declining into 18-Month Hurst Cycle Low | Ahmed Farghaly

Major asset classes (equities, metals, cryptos) are entering the final phase of their current 18-month cycles (beige-yellow in first chart below), with synchronized troughs expected from late January into early March 2026. 

S&P 500 / US Equities: The August 2024 trough is identified as the 54-month cycle low. The brief break beneath it in April 2025 is viewed as a false Trump—“Liberation Day”—Tariff straddle and the first 40-week/9-month cycle trough within the current 18-month cycle. Since that time, price action has built a clean sequence of 20-day, 40-day, 80-day, and 20-week cycles. 

S&P 500 (daily closes); 2020 to December 2025: The Big Picture. 

 

S&P 500 (daily bars); September to December 2025: Last stage of the 18-month cycle.

The current 20-day cycle (magenta) ideally bottoms on December 7 (Sun), and the 40-day cycle (red) on December 23 (Tue).

 

The market has completed the latest 80-day trough on November 21 (Fri) and has now entered the final 80-day cycle before the 18-month (beige-yellow) low, which is due around mid to late January 2026 (second chart above). A rally out of the 80-day cycle low into December, but without a new all-time high, was expected because the broken 20-week VTL typically marks the 40-week peak (see first chart). 

 

An early December high remains likely before a meaningful decline into the 18-month trough. This forthcoming weakness is regarded as a mid-cycle correction within the still-intact 54-month cycle upswing. Strong gains are projected for Q2–Q3 2026 as the new 18-month cycle rises.

Reference:
Ahmed Farghaly (December 1, 2025) - Hurst Cycles Update: S&P 500, US Dollar, Gold, CRB Index, Interest Rates, Bitcoin. (video)

Hurst Cycles in the CNN Fear & Greed Index.

See also:

Ahmed Farghaly (December 2, 2025) - Hurst Cycles Update (S&P 500, US Dollar, Gold, CRB Index, Interest rates, Bitcoin). 

Ahmed Farghaly (November 2, 2025) - S&P 500 Hurst Cycles Analysis: Next Peaks and Troughs.

Ahmed Farghaly (October 18, 2025) - Long-Term Commodity Cycles: Unraveling the Big Picture.
Ahmed Farghaly (October 24, 2025) - J.M. Hurst’s "Principle of Commonality": One Divine Force.

David Hickson (December 1, 2025) - Bullish or Bearish? - Hurst Cycles Market Update. (video)

TPR (2025) - J.M. Hurst’s Cyclic Theory. 

J.M. Hurst (1975) - The Cyclitec Cycles Course.

 

High-Confidence Position Trading: Dow Jones Industrials

divided by Consumer Price Index, 1942 to 2025, and Forecast into 2037.

 

» A "straddle" is an analysis period that has its high above the FLD and its low below. «

(Cyclitec Cycles Course: Lesson 8, p. 8-14; Lesson 9, p. 9-11; Appendix C, Chart #47).

A "false straddle" is caused by an exogenous shock—an abrupt, unpredictable event originating outside the market's endogenous cyclic structure—that temporarily disrupts the established hierarchy of cycles, such as the March 2020 COVID-19 pandemic or the April 2025 announcement of Trump's global "Liberation Day” tariffs.

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.

 

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

2025 S&P 500 Post-Election Year Seasonal Pattern since 1949.

  

 2026 S&P 500 Midterm Election Year Seasonal Pattern since 1949.

 

Nicholas D. Savino: S&P 500 Forecast for December 2025.

 

See also:
Jack Gillen (2009) - Year-End Rally, January Effect, and Trend for the Year Ahead.

2026 S&P 500 Midterm Election Year Patterns by Political Party | Robert Miner

The Midterm Election Year typically performs the worst in the four-year election cycle. The chart below illustrates the average Midterm Election Year performance of the S&P 500 since 1950, categorized by first-term political party (1st Term Democrats, 1st Term Republicans):

Winter High – Summer Low –  Bull into Year-End.
First week of January: Major high (around +0.5%)
Second week of February: Major low (around -4%)
Mid-April: Major high (around +3%)
First week of August: Major low (around -6%)
Last week of 2026: Major high (around +8%)

Net Long-term Average of Midterm Election Year Performance under 1st-Term Republicans: +3%.

 

Reference:

Robert C. Miner (January 31, 2024) - The Definitive Guide to the U.S. Election Cycle and Stock Market Trends: 

Profit from the most consistent cycle in the U.S. economy.

 

See also:
Robert Miner (January 8, 2025)  - S&P 500 Post-Election Year Patterns by Political Party. 

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.

S&P 500 Hurst Cycles Analysis: Next Peaks and Troughs | Ahmed Farghaly

J.M. Hurst's Principle of Commonality suggests that major markets worldwide bottom at approximately the same time. Consequently, my phasing analysis for the S&P 500 is very similar not only to other US stock indices, but also to the CRB index, crude oil, and global equities.

Long-Term Phasing: The 2003 trough initiated a new 54-year Kondratieff cycle, whose first 18-year cycle (a 17.17-year Kuznets swing) concluded with the May 2020 low. This trough was a "straddle to the right," a timing deviation caused by the swift, exogenous shock of the COVID-19 pandemic.

S&P 500 (daily bars) from 1999 to November 2025.

 

The 18-year cycle subdivides into two 9-year cycles. Crucially, the major 2008-2009 decline is considered a "false break" that does not negate the 2003 low. Following 2020, the first 54-month (Kitchin) cycle completed in August 2024, and the S&P 500 is now progressing through the second.

Analog Selection and Projection: The market action preceding the 2008-2009 crisis must be negated as an analog because it was driven by an exogenous factor that broke the 2003 low, a condition entirely absent in the current cyclical environment.

 

S&P 500 (daily bars) from January 2023 to November 2025.

 The projection of the 40-week cycle has a 95% out-of-sample correlation.

 

Lacking the preferred 18-year analog (typically required for a correlation coefficient >0.8), we utilize the 9-year cycle position to project the current 18-month cycle. After synchronizing the 40-week cycle troughs, this model proved highly effective, demonstrating a 95% out-of-sample correlation. Instead of a direct price overlay, the optimal approach is to detrend this projection and apply it to the RSI. This detrended analog shows a high correlation, suggesting a three-swing pattern for the US equity market, which is currently in the anticipated downswing.

Short-Term Outlook: The short-term cyclical position projects an 80-day cycle trough around November 14-16 (Fri-Mon), followed by a rally into early December, before a final selloff into year's end.

 

S&P 500 (daily bars) from June 2024 to November 2025.

Decline into 80-day low around November 14-16 (Fri-Mon); rally to December 8 (Mon) high; 

final decline into an 18-month or 40-week cycle low around December 25 (Thu).

 

Conversely, the more dominant 9-year cycle analog suggests a period of sideways consolidation near current levels. Under this model, new highs are unlikely to be significant, and the market will largely trend sideways until the 18-month cycle trough is established.

 

Reference:

Ahmed Farghaly (November 2, 2025) - SPX Time Cycle Analysis via Economic Waves. (video)

 Ahmed Farghaly (November 2, 2025) - Beyond the Headlines: Navigating US Markets with Long-Term & Short-Term Cycles.

 

FLD Cascade Pattern on XAUUSD chart indicates $3,000/oz target by Q1 2026.

 

Decoding the Next Global Conflict: Commodity Prices Signal Kuznets War-Phase.

Yearly and Q4 2025 Pivot Levels for the S&P 500

S&P 500 (quarterly bars, log scale): Yearly Pivot Points (P), S2, and R2 levels from 2013 to 2025.
 

S&P 500 (weekly bars): Yearly and Q4 2025 Pivot Levels.

» Don't look at the range of S2 to R2 as support and resistance levels. Rather, consider them oversold (S) and overbought (R) areas. If two [different time frame] values are close together then they lend more significance to the area. Avoid going long when the market moves above R2 (it's overbought). «

 John Seckinger.

Reference:
John Seckinger (2004) - Take a Two-Dimensional Approach: A Sophisticated Look at Pivot Points.

Frank Ochoa (2010) - Secrets of a Pivot Boss. 
Jason Jankovsky (2007) - The Importance of Buy/Sell 50% Retracements.
James Dalton, Eric Jones & Robert Dalton (1990) - Mind over Markets. 
Charles Drummond (1979) - Point & Line. 

Of course. 

Nothing to do with the auction process, market making, algos, price ratios, re-balancing, nor price action logic.

US Economy: A Closed-Loop Scam And AI-Bubble About to Pop? | Bloomberg

The entire US economy right now seems to be seven companies sending a trillion fake dollars back and forth to each other. This isn't a joke. This is actually real, and the AI scam is going to come crashing down. Soon?

The AI Funding Loop Scam and Bubble according to Bloomberg, October 8, 2025. 

 

Sooner or later. A Bloomberg diagram (see above on the right) reveals trillions in circular AI deals among tech giants like Nvidia ($4.5T market cap), Microsoft ($3.9T), and OpenAI ($500B valuation). Examples include Nvidia's $100 billion investment in OpenAI and Oracle's $300 billion cloud partnership. This interconnected funding, detailed in Bloomberg's October 8, 2025, report, has fueled a $1 trillion AI market and $192.7 billion in 2025 Venture Capital investments. However, as these mutual deals lack broad economic productivity gains, they raise concerns about a potential bubble.
 

The "Magnificent 7" make up approximately 30% of the S&P 500.

  

The "Magnificent 7" mega-cap tech stocks—Apple, Amazon, Alphabet, Meta , Microsoft, Nvidia, and Tesla—make up approximately 30% of the S&P 500 and have driven most of the index’s recent performance. As of October 26, 2025, their combined market capitalization exceeds $21 trillion, highlighting their outsized global influence. Nvidia leads the group with a $4.535 trillion market cap, driven by AI chip demand, with Apple and Microsoft close behind in the $3.9 trillion range. While Tesla has the lowest capitalization in the group, its explosive one-year growth reflects optimism around EVs and autonomy despite recent volatility.

» We're gonna win so much that you may even get tired of winning! You’ll say: 'Please, please, it’s

too much winning. We can't take it anymore, Mr. President. It’s too much!' And I’ll reply—'No, it isn’t! 

We have to keep winning, we have to win more!' «

 Circus Maximus Ringmaster Narcissus during his presidential election campaign in October 2024.

 

The group's average trailing Price-to-Earnings (P/E) ratio of approximately 70 is significantly higher than the S&P 500's average of about 25, signaling substantial bubble risks. Nvidia’s P/E of 53.22 and Tesla’s extremely high 303.30 suggest a premium pricing based on lofty future growth expectations. However, forward P/E ratios, such as Alphabet’s 23.31, indicate potential P/E compression if growth moderates. Alphabet leads the group with a 60.44% one-year return, fueled by ad revenue and AI integrations like Gemini. Tesla's 66.51% one-year gain stands out but is contrasted by a -3.40% daily drop, tied to recent production updates. Year-to-date, Nvidia (+38.73%) and Alphabet (+37.75%) are the top performers, while Amazon (+2.20%) and Apple (+5.32%) have cooled amid broader market rotations.

Reference:
Bloomberg (October 8, 2025) - The Circular OpenAI, Nvidia and AMD Deals Raising Fears of a New Tech Bubble.

Bloomberg (October 8, 2025) - OpenAI, Nvidia Fuel $1T AI Market With Circular Deals (Video). 

Bloomberg (October 7, 2025) - OpenAI’s Nvidia, AMD Deals Boost $1 Trillion AI Boom With Circular Deals.

  

US margin debt reached a record high of $1.13 trillion in September 2025, a 6.3% monthly surge, according to FINRA margin statistics. The Wolf Street chart above shows this leverage at 2% of the S&P 500 market capitalization, surpassing the 1.7% peak seen during the dot-com bubble in March 2000. This metric tracks investor borrowing for stock purchases; historical spikes, such as the 2.5% of market cap level preceding the 2008 financial crisis, have often foreshadowed sharp market corrections, as borrowed funds amplify both rallies and forced selling during downturns.

 

» As bearish as I want to be, I’d say the odds of any pullback being only a consolidation and

not the real reversal are increasing as the next major cycle inflection is early next year. «
Tom Pizzuti, October 27, 2025. 

 

October 29 (Wed): META, MSFT, GOOGL; October 30 (Thu): AMZN, AAPL.

See also:

TPR (August 13, 2025) - Buffett Indicator Hits All-Time High with Market Cap-to-GDP Ratio at 212.1%. 

TPR (October 9, 2025) - The Dow-to-Gold Ratio (DJI/XAU) Collapses: Get Ready for Tangible Assets.

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

Lieutenant-General Sir John Bagot Glubb (1978) - The Age of Decadence.