February 2025 Seasonal Pattern of US Stock Indices | Jeff Hirsch

Monthly high in US stocks around February 12 -14 (Wed-Fri), followed by avg. 3% decline into month-end.

 

Reference:

  Jeffrey A. Hirsch (February 11, 2025) - Usual February Weak Trading.  

 Thursday and Friday before Presidents’ Day weekend: 

S&P 500 up 10 of last 14, DJIA up 11 times.

 

 S&P 500 seasonality: first ten sessions and last ten sessions of each month since 1928.

See also:

BeSomebodyFX (January 14, 2025) - The S&P 500's Most Consistent Seasonal Patterns. With statistics.

Robert C. Miner (January 8, 2025) - S&P 500 Post-Election Year Patterns by Political Parties.
Jeffrey A. Hirsch (January 1, 2025) - S&P 500 Post-Election Year Seasonal Patterns.

 

 » This was my last bullish email for the first quarter. «
Scott Rubner, February 13, 2025.

 

2025 02 18 (Tue) = SUN @ 29 AQU = 329 degrees = negative = Rain Water [雨水]
2025 02 23 (Sun) = SUN @ 4 PIS = 334 degrees = negative
2025 02 24 (Mon) = SUN @ 5 PIS = 335 degrees = negative
Sensitive Degrees of the Sun for the NYSE, Jack Gillen, 1979.

2025 Outlook on S&P 500, Cryptos, Currencies, Metals & Energy │ Namzes

In 2025, the S&P 500 is expected to head toward a multi-year major market top. The overall structure of the S&P 500 is forecasted to rise until mid-January, followed by a correction of more than 10% into late February or mid-to-late March, and then a melt-up into a major top in mid-July or late-August. This will be followed by an approximately 17% drop into late October that will trigger a bear market.

  2025 Roadmap for the S&P 500. 

 

S&P 500 projection for 2025 (timing, not magnitude) with seasonally strong windows in the bottom panel.

Namzes on X, January 6, 2025.

The S&P 500 is projected to rise until around January 17, reaching approximately 6,250, then experience a 10%+ correction by the end of Q1, targeting around 5,600. Key buy points are expected around February 26 and in the second half of March, with the ideal date being March 28, which will set up the final leg up. A minor buy point is likely around June 27. 

 

 » What we can expect in 2025 is a dip-rip-crash structure. «

The major top is anticipated around July 17, with the possibility of a lower high or a double top/divergent high by August 22, with a minimum target of 6,500 and an upside target of approximately 7,000. After this, the market is expected to drop into a low around October 27, aligning with seasonal and nested cycle lows, followed by a bounce that ultimately fails. The S&P 500 is expected to end the year in the red, setting up for a challenging 2026, with a year-end target of 5,650.

 

In 2025 we face a conflict between the Decennial Cycle (years ending in "5"), which is typically the best year, and other cycles that suggest the market will peak in 2025. I will provide commentary on each cycle, starting with the 3.5-Year Kitchin Cycle (41-Month Cycle). 

 

1.) The current Kitchin Cycle began in October 2022 (when we accurately called the bear market low), and 2025 will be year 3, which usually marks the peak. After that, the market is expected to decline into late 2026, which aligns with the ideal low of the next 3.5-year cycle. 

 

 2025 will be year 3 of the 3.5-year Kitchin cycle.

2.) Looking at the 4-Year Presidential Cycle, 2025 (the first year) is expected to follow a pattern of a spring dip, a summer rally, and a fall crash. I believe this is the key setup for next year, followed by the second year (2026), which is typically the weakest in the 4-Year Cycle. 

 

3.) The longer 18.6-Year Cycle is entering its peaking window in 2025, or possibly 2026. We are entering year 17 of the cycle, so we should begin watching for signs of a top, such as a marquee event like the SpaceX IPO. Market tops are a process, but we should start looking for indicators like weakening economic data, deteriorating market breadth, and earnings rolling over.

 

 The 18.6-Year Cycle is peaking in 2025, or possibly 2026.

 

4.) The Decennial Cycle shows that years ending in "5" are typically the most bullish in the 10-Year Cycle and rarely have negative returns. However, I believe we may have pulled some of the gains from 2025 into 2024 (since year 4 usually experiences sideways consolidation, setting up a blow-off top in 2025). Given the strength of the Decennial Cycle, we must be mindful that the fall of 2025 could be stronger than I currently anticipate. The average seasonality for year 5 is shown in the second chart.

 

 Years ending in "5" are typically the most bullish in the 10-Year Cycle.

 

 A close-up of the typical Year 5 seasonality.

5.) I analyzed the years within the 4-year cycle pattern and identified the 11 most similar years, based on a high correlation score and comparable structure. From this analysis, I created a composite historical projection, shown in green. I’ve also included the composite 4-year cycle for reference, and you can see that the best-matching years closely follow the typical 4-year path.

 

The green composite line represents a historical projection based on 

the 11 most similar years within the 4-year cycle pattern.

6.) The 5-Year Liquidity Cycle, proxied by the M2 year-over-year (YoY) change, is expected to peak in the second half of 2025 and then decline until late 2028 or early 2029. The Reverse Repurchase Agreement (RRP) is nearly drained, and while the Treasury General Account (TGA) could provide a temporary boost if it’s spent down, the Fed will soon halt Quantitative Tightening (QT). However, other central banks can't ease much due to the strong U.S. dollar. Maintaining historically overvalued equities will require a significant liquidity injection.

 

 Maintaining historically overvalued equities will require a significant liquidity injection.

The ideal bottom of the 5.3-year inflation cycle falls around the end of 2025. It largely depends on oil, which should begin its multi-quarter run sometime in 2025:

 

 The bottom of the ideal 5.3-year inflation cycle falls around the end of 2025.

7.) On the macro front, GDP growth is expected to peak in mid to late 2025, with rising unemployment signaling a recession in early 2026 or late 2025. The 5-year liquidity cycle is expected to peak around mid-2025 and roll over, which will create challenges for overpriced equities and crypto. The Fed’s actions regarding liquidity will be crucial, particularly if it continues supporting asset prices without real economic justification. 

 

 GDP peaking phase around mid to late 2025.

■ Bitcoin will experience a deep retest into a March 2025 low, followed by one more run at the 2024 highs in early summer, after which crypto will enter a multi-year bear market. In my opinion, there is a high probability that the next 4-year cycle (2026+) will be left-translated, with Saylor and MicroStrategy (MSTR) being liquidated and the Tether-fraud (USDT) likely exposed. Meanwhile, almost all altcoins will lose 99-100%. It is currently unclear whether Bitcoin will act more as a NASDAQ proxy or a monetary hedge in the years ahead. Many altcoins may have already peaked for the cycle, but some, like Ethereum (ETH), still have more upside.

 

■ The Dollar is likely to remain in an uptrend into 2025-26. There is a potential pullback early in the year, helping risk assets push higher, followed by a rally into spring (and a subsequent sell-off in risk assets). Then, a big correction in the USD is expected into the July-August low, which should coincide with the stock market top.

 

■ In the Euro, an 18-month cycle low is due and will likely occur around March 2025. The subsequent 18-month cycle is likely to be left-translated, with a drop into the 2026 four-year cycle low, targeting below parity with the dollar.

 

 EUR going to crash into 2026 low.

■ The Yen is expected to begin a multi-year uptrend, leading to trillions in capital flowing back to Japan in the years ahead.

 

 » ¥ strength leading to repatriation or repatriation leading to strong ¥? «

 

■ Bonds remain in a secular bear market, so any rally in bonds will be cyclical (driven by a growth scare or recession), followed by a significant rally in rates. A potential counter-rally in bonds is expected in Q1 2025, but it is likely to fail. The technical target for TNX is 5.5%.

■ Given that 2022 was the 8-year cycle low in Gold, we now have a bullish intermediate and long-term bias. There is a potential low in the spring around the 2,400 support, followed by a push higher towards 2,800–3,000+ into 2026. Central banks won’t stop buying as the war cycle and geopolitical tensions intensify, while governments debase currencies.

 

 Gold upward bias from Q2 2025 onwards.

 

■ Silver is expected to reach 38.00 within the next 6 quarters.

■ All energy should be in an uptrend over the next 6-8 quarters, with Natural Gas likely leading (reaching a new all-time high in 2026).  

 

 US Natgas Prices Highest since December 2022. 

 

The next best entry opportunity in Natural Gas is likely to occur
at the end of January to early February 2025, with a confluence of
the 100-day cycle low and the seasonal low. The above is composite
cycle chart from December 3, 2024 for reference.

 

The 3.5-YearCrude Oil cycle (left chart) is starting with long consolidation. 

Leading indicators (second chart) pointing to expansion move due in 2025-26. 

 

Crude Oil is expected to reach the 80 in the spring of 2025, then 100, and 150 by 2026. 

 

 

» Energy will outperform after big tech tops. «   

My Crude Oil leading indicators and cycles suggest a big move in the next 2 years, but the exact timing of the expansion is hard to pinpoint, potentially around the end of 2025 into 2026. [see also HERE]. Uranium is likely to return to 100+ in 2025, and Coal should also see gains.

 

Reference:

Namzes on X, December 27, 2024.

 

 » Larry Williams is more bullish than me, but also cautious beyond 2025. «

2025 US Stock Market Outlook │ Larry Williams

My outlook on the US stock market in 2025 uses the metaphor "Clint Eastwood Market," representing a mix of good, bad, and ugly factors:

• On the positive side, there are no immediate signs of a US recession, with strong employment figures and a labor market expected to improve in early 2025. Business conditions remain stable, and historically, stock markets tend to perform well in the first year of a presidential term. 
• However, there are risks, including potential profit-taking after a strong 2024 market, the uncertainty surrounding trade policies and tariffs, and the unpredictable actions of the Fed, Congress, and business leaders like Elon Musk. 
• On the negative side, market valuations, such as high price-to-earnings and Shiller CAPE ratios, suggest that the market is overvalued, which increases the risk of a correction. Additionally, industrial production is underperforming, which could hinder economic growth, and inflationary pressures from the excessive money supply expansion since the COVID-19 pandemic may contribute to market volatility.

 

Very Long-Term Market Wave in the DJIA and US-stocks down into 2038.

 

 Shorter Long-Term view on the DJIA with major lows in 2025 and 2028.

 

2025 will be a trading range market with a bullish bias.

 

 Selling pressure in Q1 of 2025. Second half of the year strong. Overall gains.

Given the current very high valuation ratios, the 2025 forecast indicates slower growth and market underperformance compared to historical averages. Therefore I don’t foresee a runaway bull market in US stock indices in 2025, and volatility is likely to be a key characteristic, with short-term rallies and corrections. Very long-term market cycles suggest we are at the beginning of a prolonged period of sideways movement, with the next major bull market not expected to begin until around 2038. 

Regarding a major crash that some are constantly talking about, I don't see it occurring in 2025 either. While the market will be challenging, the overall bias will lean toward the upside.

Reference:
Larry Williams ( December 20, 2024) - 2025 Market Outlook: The Good, Bad, and Ugly. (video)

2025 Bitcoin forecast.

See also:

Larry Williams (December 31, 2024) - Forecast 2025.

Larry Williams (December 18, 2023) - 2024 US Stock Market Outlook.

Larry Williams (2022) - How Markets Move: The Natural Cycle of Range Change.  

The S&P has traded above its 200-DMA all year. This has happened 11 other times since 1952, and the next-year move has been about half the average. Last time this happened was in 2021, and before that, 2017  — Bespoke, December 24, 2024.

S&P 500 Soared 7% in Summer, Shifts Weakness to October | Wayne Whaley

For this study, summer is defined as the three months from June to August. Historically, the S&P 500 index tends to show modest performance during the summer, with an average gain of 1.43% since 1950 over these three months. In 2024, however, the S&P 500 achieved an impressive 7.03% gain during the summer, with individual gains of 3.5% in June, 1.1% in July, and 2.3% in August.

 

The weakest seasonal period of the year historically occurs in the second half of September. However, strong summers often push much of the traditional September weakness into October, specifically from October 18th to October 28th. During this period in the years with a summer gain of over 5%, the S&P 500 has averaged a loss of 2.53%, with a performance record of 4 gains and 19 losses.

This period is followed by one of the strongest periods of the year, from October 28th to November 5th. In years with a summer gain of over 5%, this timeframe has averaged a gain of 2.61%, with a performance record of 21 gains and 1 loss.

Reference:
Wayne Whaley (August 31, 2024) - Five Percent Summers. 

 

4-Year Presidential Election Cycle 1949-2020 vs 2021-2024

— Jeff Hirsch, August 19, 2024

S&P 500 Strength into May 1st & Weakness through Mid May | Larry Williams

Larry Williams expects U.S. stock market strength through May 1 (Wed) and weakness to follow through the middle of May.

 

That weakness could be followed by a relief rally into early June, then another leg down in July. “I am heavily short here,” he says. He expects a strong end of the year as a rally gets under way in early September. 

Quoted from:
MarketWatch (April 23, 2024) - Ralph Acampora, Larry Williams and Vance Howard see market weakness ahead. 

 

See also:
Larry Williams (December 18, 2023) - 2024 US Stock Market Outlook.

Crude Oil's 10-Year Leading Indication for US Stock Market | Tom McClellan

One of the big picture forecasting tools is crude oil prices as a leading indication for the overall stock market. The first chart shows crude oil prices back to 1890 compared to the Dow Jones Industrial Average plotted on logarithmic scales. The price of crude oil is shifted forward by 10 years. The correlation isn't always perfect, but generally speaking, when there is a rise in crude oil prices, 10 years later, there is a rise in the stock market. When crude oil prices go flat, the stock market goes flat. 

We are not yet quite at that 10 year echo point in stocks, which would equate to June of 2024, 10 years after crude oil peaked. That means the next few years are not going to be so great, especially between now and early 2026. Early 2026 will be a great time for investors to ride the stock market long all the way to 2028. 

 

Quoted from:
Tom McClellan (Mar 28, 2024) - 'Unpleasant Time' Ahead For Stock Market. (video)

 

When December, January and February are each positive ... | Wayne Whaley

Quoted from:
Wayne Whaley @ Twitter/X - Feb 24, 2024.

S&P 500 vs NAAIM Exposure Index │ ISABELNET

The National Association of Active Investment Managers Exposure Index represents the two-week moving average exposure to U.S. equity markets reported by NAAIM members.

 The NAAIM Exposure Index, with a reading of 95.58, indicates a strong bullish sentiment among active investment managers, reflecting their high confidence in the future trajectory of the stock market (published Feb 16, 2024).

 

 S&P 500 and NAAIM Index above 97 (published Feb 15, 2024)

Active investment managers are notorious for buying equities at tops and selling them at bottoms, highlighting the difficulties they encounter in accurately timing the market and making lucrative investment choices.

Reference:
ISABELNET (Feb 15+16, 2024) - S&P 500 and NAAIM Exposure Index above 97.

 

Still up: The 3 Day, the 9 Day and the 18 Day cycles vs the S&P 500 Index.

 

Jeffrey A. Hirsch (Feb 16, 2024) - DJIA S&P 500 & NASDAQ are all up 7 of last 12 days after the Presidents’ Day, but long-term record remains weak. Since 1990, average performance ranges from –0.56% for NASDAQ to –0.28% for DJIA. 

Sizable declines in the last 2 years have worsened the record.

2024 in the Four Year Election Cycle │ Dimitri Speck

 

Dow Jones, 4-year cycle, calculated over 121 years.

2024 is an election year. The election cycle suggests a weak first half of the year,  and a good second half. The election year gets off to a weak start. The left quarter of the chart shows the typical performance of the Dow Jones in election years. As indicated by the red arrow, these typically posted losses in the first half of the year. After that, things look much better, as indicated by the green arrow.

Quoted from:
Seasonax (Dec 13, 2013) - 4-Year Election Cycle: How will 2024 go?

2024 US Stock Market Outlook │ Larry Williams

 

Larry Williams' 2024 projection for US Stocks:

 

First week of January to last week of February - UP

 Last week of February to last week of April - DOWN

 Last week of April to last week of Juli - SIDEWAYS-TO-UP

First day to last day of August - UP

First week to third week of September - DOWN  

  Third week to fourth week of September new high of the year - UP

Fourth week of September to first week of November - SIDEWAYS-TO-DOWN  

 First week of November to first week of December - UP

 First week to third week of December - DOWN

 Third week to last trading day of December printing the yearly high - UP

 

The December 2023 Low is a key price level in Q1 of 2024. 

 

Larry Williams identified June 2024 in the current decennial pattern 

 as "the sweet spot with 90% accuracy" to buy and hold until December 2025.

 

 

Reference:

Larry Williams (Dec 15, 2023) - 2024 Market Outlook. (video)

The 41-Month Kitchin Cycle in Stocks │ Edward R. Dewey

Another cycle that has done all in its power to keep cycle scientists humble is one averaging 40.68 months in length. It has been present in industrial common-stock prices since 1871 and was discovered in 1912 by a New York group of investors. These gentlemen had learned that the Rothschilds had analyzed British consols (government obligations) and had broken up the price fluctuations into a series of repeating curves that had been combined and used for forecasting. The New York group hired a mathematician to discover the secret formula of the Rothschilds, and working with the Dow-Jones Railroad Averages, he discovered a forty-one-month cycle, plus three others, which his employers used to help them invest in the market. Apparently they were very successful around World War I.

 

Figure 38: The 41-Month Rhythm in Stock Prices, 1868-1945.

 

Some ten years after the original discovery, Professor W. L. Crum, of Harvard, noted a cycle of "39, 40, or 41 months" in monthly commercial-paper rates in New York. Almost simultaneously, Professor Joseph Kitchin, also of Harvard, discovered a cycle that he called forty months in six economic time series, bank clearings, commodity prices, and interest rates in both Great Britain and the United States from 1890 to 1922. As far as I know, it was not until 1935, twenty-three years after the original discovery, that this cycle was again noticed in the stock market. Our old friend Chapin Hoskins, who knew nothing of the earlier work, discovered this cycle in many series of price and production figures, including common-stock prices. Early in 1938 he made an extensive study of this cycle for one of the large investment-trust services.

Figure 38 shows the forty-one-month cycle (now refined to 40.68 months) from 1868 through 1945. As you can see, while its waves are not identical to an ideal 40.68 wave, which is represented by the broken zigzag, there is an amazing correspondence between them. This cycle persisted through wars and peace, good times and depressions.

Then, in 1946, something strange happened to our cycle. Almost as if some giant hand had reached down and pushed it, the cycle stumbled, and by the time it had regained its equilibrium it was marching completely out of step from the ideal cadence it had maintained for so many years. As you can see in Figure 39, it has regained the approximate beat of forty-one months or so, as before, but its behavior now appears upside down on our graph.

 

Figure 39: The 41-Month Rhythm, Upside Down, 1946-1957.

 

Scores of explanations and reams of paper have been expended to explain this behavior. We are familiar with most of the possibilities, such as distortion by random behavior, two or more other cycles of near lengths, and even a general public knowledge of this particular cycle, which may have had a distorting effect on its timing. But, in truth, no one can positively explain what happened in 1946 any more than they can explain the regularity of the rhythm for all the years that preceded it.

Quoted from:
Edward R. Dewey & Og Mandino (1971) - Cycles: The Mysterious Forces that Trigger Events.

 

Joseph Kitchin (1923) - Cycles and Trends in Economic Factors.
 

42-Month Cycle in the DJIA (weekly bars), March 2020 - October 2023.