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)

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.

DJIA Up in 77.3% of April OpEx Weeks Since 1982 | Jeff Hirsch

April's monthly option expiration is generally bullish across the board, with respectable gains on the last day of the week, the entire week, and the week after. Since 1982, DJIA has advanced 28 times in 44 years on monthly expiration day, with an average gain of 0.20%. 

 

DJIA has risen in 34 of the past 44 April options-expiration weeks (next week), with an average gain of 1.00%. The S&P 500 and NASDAQ also show strong seasonality, averaging weekly gains of 0.77% and 0.76%. Losses in 2022, 2024, and 2025 have tempered the longer-term averages. 

 DJIA Up in 77.3% of April OpEx Weeks since 1982.

 

 

S&P 500 Up in 65.9% of April OpEx Weeks since 1982.

S&P 500 has a similar record, also with 28 advances and an average advance of 0.15% on monthly expiration day. Monthly expiration day was trending solidly bullish after four or five declines from 2014 to 2018, but took hits in the 2022 bear market, 2024, and in 2025 due to Liberation Day tariff uncertainty.

NASDAQ Up in 63.6% of April OpEx Weeks since 1982.

 

Monthly expiration week also has a bullish track record over the past 44 years. Average weekly gains are +1.00% for DJIA, +0.77% for S&P 500, and +0.76% for NASDAQ. The bullish bias of April monthly expiration also persists during the week after, although average gains have not been as strong, with selling pressure rising (from 2018 to 2022). However, strength has returned since 2023. NASDAQ jumped 6.73% in the week after in 2025.

► April seasonality strong: 2nd-best month for DJIA and S&P; 4th for NASDAQ.
► April 2026 started solidly (+0.52% DJIA, +1.98% NASDAQ) despite geopolitical tension, rising energy costs, April 15 tax deadline.
► Historically, early April outperformed—since 1994, strength shifted to second half.
► Post–April 15 stronger (especially NASDAQ, Russell 2000).

Reference:
Jeffrey A. Hirsch (April 10, 2026) - DJIA Up 77.3% of the Time During April Monthly Expiration Week since 1982.

 Jeffrey A. Hirsch (April 7, 2026) - Income Tax Deadline, Earnings Season & Iran War: Second Half of April Historically Better.

See also:

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

Classic S&P 500 Smart Money vs Dumb Money Rebound Setup | Alex Krainer

A contrarian signal is flashing for the S&P 500 near 6,477. Smart Money Confidence (blue line) is climbing to 0.6 while Dumb Money Confidence (red line) drops to 0.4. This split occurs amid Extreme Fear, with the CNN Fear & Greed Index at 18, despite broader bearish technicals and geopolitical volatility.

» Smart money confidence is growing while dumb money confidence falls. Meanwhile, the Fear & Greed Index has hit
Extreme Fear. Yes, the setups across the board look ugly, but chasing shorts here is riskier than remaining patient. «

 

Historically, this exact divergence—rising institutional confidence against falling retail optimism—has preceded S&P 500 rebounds roughly 70% of the time, per SentimenTrader backtests. It suggests the current sell-off may be exhausted, offering a high-probability upside reversal once fear peaks.

Reference:
Alex Krainer, March 26, 2026.

 

March 27, 2026 Update: This level of Extreme Fear (10) has been seen at previous bottoms, including those that preceded bear market rallies in 2022. The shortest bounce before lower lows occurred in 2025. A bullish divergence is now appearing, which validates the thesis. 

See also:
Branimir Vojcic (March 23, 2026) - S&P 500 Outlook: Late March Low, May Peak, October Low.

 

 

April Stock Market Performance in Midterm Election Years | Jeff Hirsch

Over the past 21 years (solid lines in the chart below), April has exhibited a pattern of steady gains starting around April 7 (Tue)(Trading Day 5) and continuing through the end of the month, with only minor fluctuations along the way. Overall, it has generally finished positive across the board.

 

Midterm election years since 1950 (dashed lines) show strength from April 7 (Tue) through mid-April only, followed by choppy trading that typically ends the month flat or in negative territory.

 

Reference:

Jeffrey A. Hirsch (March 25, 2026) - April Weaker in Midterm Election Years.

 

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

  

See also:

Jeffrey A. Hirsch (December 29, 2025) - 2026 Midterm Election Year Seasonal Patterns of US Indices. 

Nicholas D. Savino (April 1, 2026) - April 2026 S&P 500 Forecast.

US Stock Indexes Trigger Rare March-December Low Indicator | Jeff Hirsch

Originated by Lucien Hooper, a Forbes columnist and Wall Street analyst in the 1970s, the December Low Indicator is based on the Dow closing below its December closing low in the first quarter of the New Year. DJIA’s December closing low was 47,289.33 on 12/1/2025.

  

See the Historical Analogue 1966 vs. 2026
in @Fiorente2's "The 60-Year Cycle in US Stock Indexes Revisited."

 

The indicator also applies to the S&P 500, which closed below its December closing low of 6,721.43 (set on 12/17/2025). Historically, years when the S&P 500’s December Low Indicator was breached alongside a down January Barometer were weaker years. When the January Barometer was positive and the December Low was crossed, years tended to be stronger — which is the situation we find ourselves in today.

 

When the market has closed below its December closing low in the first quarter of the year, the market has dropped, on average, another 13.5% on the S&P 500 and 10.9% for the DJIA from the trigger point. Now that the December Low Indicator has been triggered on both the DJIA and S&P 500, some caution is in order.

 

Why This March Trigger Is Rare

Of the 36 December Low Indicator triggers on the S&P 500, this is only the fourth to occur in March, and the sixth among the 39 DJIA triggers. We’ve broken out the S&P DLI triggers by month in the accompanying tables above.

 

It’s not surprising that most January and February triggers were accompanied by a down January Barometer. Whereas all four March DLI triggers — including yesterday’s — came in years when the January Barometer was positive.

Here’s how the three trigger months compare historically:

• January triggers (24 occurrences): Average further decline of 12.92%; full year up 14 of 24 times, average gain of 1.30%
• February triggers (8 occurrences): The worst group — average further decline of 17.26%; down 6 of 8 full years, average loss of 8.13%
• March triggers (3 previous occurrences): The mildest — average further decline of 8.12%; one year up, two down, average full-year loss of 3.70%

The historical data suggests March triggers carry less downside risk than those in January or February — a meaningful distinction given today’s trigger.

 

The January Barometer Still Points Higher

When the S&P 500 January Barometer is positive — as it was this year — the full year is up 41 of 46 years (89.1% of the time) for an average gain of 16.95%. The next 11 months are up 87.0% of the time for an average gain of 12.24%.

 

When it’s down, the year is up only 50% of the time with an average loss of 1.75%, and the next 11 months average a paltry 2.07% gain.

 

Bottom Line

While the current situation suggests the market is likely to go lower in the near term, the positive January Barometer and the broader fundamental and macro backdrop remain supportive. When the indexes and your spirits are down and contrary sentiment indicators reach extreme bearish levels — a VIX above 40, Investors Intelligence Bearish % exceeding Bullish % — that’s historically the point at which the market turns higher again. Stay cautious in the near term, but keep the longer-term odds in perspective.

 

Reference:

Jeffrey A. Hirsch (March 13, 2026) - Iran Conflict Triggers a Rare March December Low Indicator.

 

What happens once the SPY closes down four weeks in a row.

 

What happens once the weekly RSI(2) closes at 5 or below. 

See also:

@Fiorente2 (March 16, 2026) - Historical Analogue: 1966 vs. 2026. In: The 60-Year Cycle in US Stock Indexes Revisited.

Hurst Cycles Update for the S&P 500 and Bitcoin | David Hickson

S&P 500: The index is descending toward a 20-week cycle trough, with shorter cycles stretching—an indication that the underlying trend has turned bearish. A larger 18-month cycle trough later in the year remains a possibility if the decline accelerates. 

S&P 500 (daily candles), November to March (right).

Price is now moving down toward a 20-week cycle trough expected imminently, with stretched shorter cycles reinforcing a bearish trend condition. If downward momentum persists, the market could continue declining toward the next projected major trough in early May, possibly forming a deeper cyclical low.

Bitcoin: By contrast, Bitcoin may already have formed an 18-month cycle trough in early February, but its failure to rebound strongly raises doubts about that interpretation. The weak response suggests potential bearish continuation into the next larger cycle trough.

 

Bitcoin (daily candles), February to March 2026.

Bitcoin’s suspected 18-month cycle trough in early February has not produced the strong rebound typically expected after such a major low. The 20-day FLD failed to provide support, an important bearish signal. Although short-term cycles may be attempting to form a local trough, the market must soon demonstrate upward momentum. Failure to do so would imply that Bitcoin remains in a bearish phase progressing toward a deeper longer-term trough.

Reference:
David Hickson (March 9, 2026) - SPX, ASX & BTC - Hurst Cycles Market Update. (video)

See also:

Tom McClellan (March 6, 2026) - Extreme Backwardation in VIX Futures.
Jeffrey A. Hirsch (February 25, 2026) - March Stock Market Performance in Midterm Election Years.
TPR (February 22, 2026) - S&P 500 Hurst Analysis: Projection into Mid-March 20-Week Cycle Low.

Larry Williams (February 19, 2026) - 2026 Market Update: Crude, NatGas, Metals, Stocks, Cocoa. 

Extreme Backwardation in VIX Futures | Tom McClellan

As of March 6, 2026, the VIX futures market is in extreme backwardation. The spot VIX has surpassed the highest futures contract by more than 10%, signaling acute near-term panic relative to expectations of future stability.

When the price of a near-month contract exceeds those of
further-dated contracts, the market is in backwardation.

Oil futures for April 2026 delivery trading above $90, while the

contract 11 months out (March 2027) remains significantly lower at $66.50.

 

Blue annotations on the VIX chart above highlight similar negative spreads during key 2025–2026 events, such as tariff-induced sell-offs, employment revisions, geopolitical tensions, and the Bitcoin crash. These spikes often coincided with S&P 500 pullbacks that marked local bottoms before subsequent recoveries. While this pattern suggests current volatility may precede near-term stabilization, the broader market trajectory remains contingent on the resolution of underlying stressors like trade policy and global conflict.

 

Reference:
Tom McClellan (March 6, 2026) - Extreme Backwardation in VIX Futures.
Tom McClellan (March 6, 2026) - Iran War Brings Severe Oil Futures Backwardation.

 

McCelllan Oscillator vs S&P 500 as of March 6, 2026.
 

Expecting a multi-month correction with 20–25% drawdown across the board.

See also:

Nicholas D. Savino (March 1, 2026) - S&P 500 Forecast for March 2026.

Jeffrey A. Hirsch (February 25, 2026) - March Stock Market Performance in Midterm Election Years.    
Branimir Vojcic (February 23, 2026) - VIX Cycles: Forecasting Volatility Peaks Through 2032.

Larry Williams (February 19, 2026) - 2026 Market Update: Crude, NatGas, Metals, Stocks, Cocoa. 

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

Following a brief correction through March 3 (Tue), the forecast projects a rally toward a peak around March 9 (Mon). This high is expected to be followed by a decline into March 16 (Mon), a rally leading into March 27 (Fri), and subsequent weakness heading into the end of the month.

 

March 3 (Tue) Low, March 9 (Mon) High, 

March 16 (Mon) Low, March 27 (Fri) High.

 

This forecast focuses on directional timing and is not scaled for price.

 

Reference:

Nicholas D. Savino (March 1, 2026) - S&P 500 Forecast for March 2026.   

[check for updates] 

 

S&P 500, NASDAQ, DJIA, and Russell 2000 (daily bars) and 20-week cycle.

 

S&P 500 (daily bars) vs 22-year and 60-year cycles.

 
See also:
Jeffrey A. Hirsch (February 25, 2026) - February Stock Market Performance in Midterm Election Years.

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

Larry Williams (February 19, 2026) - 2026 Market Update: Crude, NatGas, Metals, Stocks, Cocoa.

Larry Williams (1998) - The Oops! Reversal Setup.

March Stock Market Performance in Midterm Election Years | Jeff Hirsch

Beginning on March 2 (Mon) (Trading Day 1), the US stock market historically follows two distinct paths. Over the recent 21-year period (solid lines in the chart below), March tends to open positively with modest gains through March 4 (Wed) (TD 3) before weakness leads to a sharp dip around March 9 (Mon) (TD 6). While indices typically move higher from March 16 (Mon) (TD 11), the NASDAQ and S&P 500 usually lead this recovery into the final close on March 31 (Tue) (TD 22).

 

March generally finishes positive across all major indices.

  

In contrast, Midterm Election years since 1950 (dotted lines) show significantly greater historical strength, potentially as a rebound from a typically tepid February. This cycle produces a front-loaded rally where R2K small caps flip from laggards to leaders, often outpacing S&P 500, DJIA, and NASDAQ. Strength generally persists until the Spring Equinox, reaching a seasonal peak on March 20 (Fri) (TD 15). After this point, indices tend to lose momentum and close out the month with choppy trading. Despite these differing mid-month trajectories, March has a 64% win rate, generally finishing positive across all indices.

 

Reference:

Jeffrey A. Hirsch (February 25, 2026) - March’s Seasonal Pattern – Early Strength Persists Longer in Midterm Years. 

 

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

 

Detrended S&P 500 Seasonality.

 

Detrended VIX Seasonality (see also HERE). 

 

S&P 500 First 10 Days and Last 10 Days of the Month (1928-2024).

 

 S&P 500's Average Daily Return & Percent of Days Positive (1928-2024).

 

 DJIA (daily bars).

 

CNN Fear & Greed Index.

Bank of America's Bull & Bear Index hit 9.3 on February 24, crossing the contrarian "sell" threshold above 8, indicating excessive optimism among global fund managers. Historically, such readings preceded median three-month drawdowns of 5.5% for the S&P 500, and 8.6% for the Nasdaq.

 See also:

Jeffrey A. Hirsch (December 29, 2025) - 2026 Midterm Election Year Seasonal Patterns of US Indices. 

Branimir Vojcic (February 23, 2026) - VIX Cycles: Forecasting Volatility Peaks Through 2032. 

Larry Williams (February 19, 2026) - 2026 Market Update: Crude, NatGas, Metals, Stocks, Cocoa.

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

Nicholas D. Savino (March 1, 2026) - March 2026 S&P 500 Forecast.