The
forecast focuses on market direction and timing rather than magnitude
of price change.
Reference:
Showing posts with label US Stocks. Show all posts
Showing posts with label US Stocks. Show all posts
Tuesday, June 2, 2026
S&P 500 Forecast for June 2026 | Nicholas D. Savino
Tuesday, May 26, 2026
NASDAQ, DJIA & Bonds: Next Bullish Wave May Be Starting | Larry Williams
Let's start with the three core market tools—often misunderstood and rarely used together effectively:
■ Fundamentals determine value: Markets ultimately move for fundamental reasons, and value is rewarded over
time—not necessarily today, this month, or even this year. A value-driven framework is indispensable.
■ Technicals define the present: They reveal current market conditions—trend, momentum, overbought or
oversold states.
■ Cycles provide the edge: They project direction and timing, identifying when opportunities are most likely to
emerge.
The process is straightforward: What has value? Where are we now? Where are we going? You need all three—none is sufficient on its own. We begin with cycles, specifically the NASDAQ, which has exhibited structural strength since 2009.
Bullish NASDAQ Cycle Analysis
Market cycles consist of recurring lows, rallies, and declines, but not all waves carry equal weight. Some phases are structurally stronger—and we are currently in one.
bias remains up, buy pullbacks.
A comparable wave (3.5-Year, 41-Month, or Kitchin Cycle) in 2016 produced a sustained rally. The current configuration is similar. Since 2023, the NASDAQ has been in a pronounced bullish cycle. While my primary focus is typically the NASDAQ, recent instability in the Dow has increased its relative importance this year. Current cycle positioning suggests the early stages of another strong upward phase—historically associated with meaningful advances.
NASDAQ Could Rally Again: Historically, this cycle turns higher in June roughly 90% of the time.
Why the NASDAQ Could Rally Again: Historically, this cycle turns higher in June roughly 90% of the time, experiences a modest pullback in August, and then continues upward. That pattern implies a constructive setup.
Markets do not require declines to rally. They often consolidate sideways before advancing—a behavior repeatedly observed. While many investors wait for pullbacks, the absence of weakness does not negate bullish conditions. My 2026 forecast anticipated higher prices and emphasized buying pullbacks—not waiting for a breakdown that may never materialize.
Markets do not require declines to rally. They often consolidate sideways before advancing—a behavior repeatedly observed. While many investors wait for pullbacks, the absence of weakness does not negate bullish conditions. My 2026 forecast anticipated higher prices and emphasized buying pullbacks—not waiting for a breakdown that may never materialize.
Dow Jones "Explosive Wave" Pattern
The Dow is forming a recurring "explosive wave" structure: consolidation followed by a sharp advance. This sequence—sideways movement transitioning into a rapid rally—has repeated multiple times.
Inflation, as anticipated, has moved higher and remains closely linked to bond market dynamics. The longer-term trajectory still points toward declining interest rates into the early 2030s. This brings us to bonds.The expected mid-June low should be understood as a cycle low in the NASDAQ and DJIA—a tactical buying opportunity, not necessarily the absolute price bottom. The broader outlook remains intact: 2026 is a bull market year.
Bond Market Setup & Seasonality
Bond seasonality is currently in a bullish phase, historically associated with rallies. Cycle analysis aligns with this timing, reinforcing the setup. The Money Flow Index indicates institutional accumulation—an early and important signal.
near-term dip is a tactical buy entry.
Institutional Positioning in Bonds: Professional money is rotating into bonds. Commitment of Traders data shows commercial participants holding their largest long position since 2023. Historically, markets tend to advance when large, informed participants accumulate.
COT data shows commercial participants holding their largest long position since 2023.
Combined with a seasonal low, a cycle low, and improving money flow, the evidence points to a high-probability buying zone.
Wait for short-term pullback, then enter in alignment with the broader cycle and seasonal trend.
Bond Market Strategy: On the daily timeframe, bonds are near a seasonal low with capital beginning to flow in. The tactical approach: wait for a short-term pullback, then enter in alignment with the broader cycle and seasonal trend. While the market has already begun to move higher, a near-term retracement would provide a more favorable entry.
Stay the course. There is no bear market. Despite persistent skepticism, the primary trend remains upward. The strategy is unchanged: buy pullbacks, not fear them. We are in a bull market.
Reference:
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Kevin Warsh is now Fed Chair, reviving fears that markets "test" new leadership—citing Bernanke (2007–09 crisis), Greenspan (1987 crash), and Volcker (late-1970s inflation). Yet history does not show leadership changes reliably trigger downturns. Context: since 1930, the S&P 500’s average annual drawdown is 16.1% (bearish extreme), its average best rally is 25.9% (bullish extreme), and mean annual return is 8.0%.
Post–Fed leadership changes, S&P 500 performance is generally not bearish: except at the 3-month horizon, advance rates exceed a 60% bullish threshold and average returns are positive. If Eugene Meyer (Great Depression) and Greenspan (1987) are excluded as likely timing outliers, results improve further: all intervals show higher average returns and win rates; at 1 year, the S&P 500 averages +12.7% and is higher 90% of the time.
Tuesday, May 19, 2026
Pre- and Post-Memorial Day Seasonal Patterns in US Stock Indexes
Memorial Day weekend (May 23-25, 2026) has become the unofficial start of summer for many Americans, marking a notable transition in financial markets. In recent years, trading activity typically begins a gradual decline shortly afterward—barring major external events—toward a later summer low.
Over the past 20 years, the Thursday before Memorial Day has delivered the strongest average gains across major indices (DJIA +0.07%, S&P 500 +0.18%, NASDAQ +0.34%, Russell 2000 +0.32%). Friday shows a solid percentage of up days—particularly for the NASDAQ (66.7%, +0.38% average)—but with more mixed overall performance. Wednesday is the weakest, with negative average returns. The dataset includes 2025; both median returns and win rates also tend to favor Thursday in several cases.Market participants refer to this summertime slowdown as the summer doldrums, characterized by anemic volume and often uninspired, range-bound trading on Wall Street. Seasonal volume patterns since the 1960s for the NYSE and 1970s for the NASDAQ show this typical lull, with daily trading volumes frequently dropping 20-40% from winter peaks, reaching troughs particularly in late July and August as vacations reduce institutional participation.
In the lead-up to the holiday, historical performance presents mixed yet distinctive results. Thursday before Memorial Day has consistently delivered the strongest average gains across the DJIA, S&P 500, and Russell 2000 in 21-year analyses. Friday, the last trading day before the long weekend, records a higher proportion of advancing sessions for most major indexes, with the NASDAQ standing out at a 66.7% win rate, an average gain of 0.38%, and nine up closes in the last ten years. That said, this Friday session also tends to feature lackluster, light-volume trading. For the DJIA, results have been essentially neutral over extended periods, with an even split of up and down closes and a modest average decline of approximately 0.05%.
May Stock Market Performance in Midterm Election Years:
Early May Strength Turns to Chop Until Late Month Pop.Beyond the immediate sessions, the broader period from Memorial Day to Labor Day (September 7, 2026) has historically produced net positive, albeit modest, results for the S&P 500. The index has advanced in roughly 70% of periods since the early 1970s, with average gains typically ranging from 1.6% to 2.8%. This summer window fits within the broader “Sell in May and Go Away” tendency, during which overall returns tend to be softer than in the November-to-April period, even as the Memorial Day-to-Labor Day segment itself often contributes positively amid the lighter volumes of the doldrums.
In midterm-election years such as 2026, these summer patterns can intersect with the broader presidential cycle, which historically features heightened volatility and often subdued returns. Midterm years frequently see notable market lows forming between late July and mid-August, aligning with the depth of the summer doldrums, reduced liquidity, and pre-election political uncertainty. Such periods have at times served as bottoming phases, setting the stage for stronger recoveries later in the year or into the following pre-election period, though outcomes vary with prevailing economic and geopolitical conditions.
Reference:
Jeffrey A. Hirsch (May 19, 2026) - Trading Mixed Before Memorial Day Weekend.
Jeffrey A. Hirsch (May 1, 2026) - May Stock Market Performance in Midterm Election Years.
Jeffrey A. Hirsch (July 8, 2024) - Summer Doldrums Have Arrived - Market Volume Likely to Continue Fading.
Jeffrey A. Hirsch (December 29, 2025) - 2026 Midterm Election Year Seasonal Patterns of US Indices.
Meghan Nalty-Roach (May 01, 2025) - How Memorial Day Impacts the Markets.
Jeffrey A. Hirsch (May 19, 2026) - Trading Mixed Before Memorial Day Weekend.
Jeffrey A. Hirsch (May 1, 2026) - May Stock Market Performance in Midterm Election Years.
Jeffrey A. Hirsch (July 8, 2024) - Summer Doldrums Have Arrived - Market Volume Likely to Continue Fading.
Jeffrey A. Hirsch (December 29, 2025) - 2026 Midterm Election Year Seasonal Patterns of US Indices.
Meghan Nalty-Roach (May 01, 2025) - How Memorial Day Impacts the Markets.
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Thursday, May 7, 2026
Record Systematic Shorts: Profit-Taking Pullback Ahead | Seth Golden
Goldman Sachs' chart, which tracks the rolling one-month change in positioning among systematic traders—primarily rule-based funds, including commodity trading advisors (CTAs), that rely on predefined models and algorithmic signals—points to a potential near-term pullback in US stock indices.
By early May 2026, a broad consensus had emerged among Goldman Sachs, JPMorgan, and Bank of America that the prevailing buying impulse in US equities had largely exhausted itself. Goldman Sachs specifically highlights that systematic traders (CTAs) remain positioned at sizable long levels—approximately $32–44 billion net in the S&P 500—but are poised to shift toward neutral or modest selling in flat or declining markets. Should key downside thresholds be breached, this could trigger substantial selling pressure exceeding $50 billion.
Nobody wants puts on the Nasdaq: The put/call ratio has collapsed to its lowest
level since 2023. Near-term mean reversion and price consolidation next?
Reference:
US equity market breadth is at one of its lowest levels since the 1980s, reaching near-record lows on a long-term chart from 1985–2025. The latest reading sits far below average and one standard deviation below the mean, signaling extreme narrowness despite repeated new highs in major indices. This is driven by heavy capital concentration in a small number of AI, semiconductor, optics, and memory stocks, which are powering index gains while the vast majority of equities significantly lag.
The S&P 500 just saw the largest call-buying day in history: $2.6T in call volume. Massive call buying forces market makers to hedge by buying stocks, pushing prices higher, triggering more hedging, and fueling a gamma squeeze. It’s powerful on the way up—and vicious on the way down when flows unwind or calls expire. This isn’t fundamentals driving markets anymore. It’s options flow moving the world’s largest index. The question isn’t if it unwinds — it’s when.
ES (daily candles): Expect a pullback or sideways consolidation toward at least the neutral mean (solid black rising line)—the equilibrium point between the premium (overextended upper red) and discount (overextended lower green) zones.
Major banks show broad agreement on resilient 2026 S&P 500 earnings growth driven by AI and the economy, but diverge on the index target due to differing views on valuation multiples. Here is a combined comparison table of their latest 2026 forecasts (as of late April 2026): Goldman Sachs, JPMorgan, and Morgan Stanley are constructive, viewing the price-EPS divergence as a buying opportunity with prices likely to catch up to upward earnings revisions. Bank of America is the most cautious, anticipating further P/E compression despite solid EPS growth.
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Monday, May 4, 2026
Hedge Funds Dump Tech, While Retail Piles Into QQQ | Jason Goepfert
Hedge funds sold US tech stocks at the second-most aggressive pace in a decade (largest net selling since 2021), according to Goldman Sachs Prime Book data.
Everybody back in the pool: 21-day sum of daily fund flows in QQQ.
This institutional selling coincides with strong retail buying, as rolling 21-day QQQ fund flows hit the third-largest inflow in recent years—even as Nasdaq 100 prices rise. A classic smart money versus retail divergence. May 7 (Thu) is the scheduled ITD #5 peak (± 4 CD) in US stocks.
Goldman Sachs Prime Book, as of April 30: Go with the flow.
The GS Prime Book reflects aggregated activity from Goldman's prime brokerage clients (a large but not complete slice of the hedge fund universe), so it's directional but not exhaustive. Similar insights sometimes come from JPMorgan or Morgan Stanley prime services reports. Goepfert specializes in sentiment indicators, including fund flows, options activity, positioning (e.g., hedge funds via prime broker data like Goldman Sachs), and retail vs. institutional behavior (e.g. Dump Money Confidence vs. Smart Money Confidence). Access requires a subscription, but he often shares highlights on X.
As of May 1, Dumb Money Confidence was very optimistic,
while Smart Money Confidence was neutral.
Saturday, May 2, 2026
S&P 500 Forecast for May 2026 | Nicholas D. Savino
The primary forecast pattern for May.
The
forecast focuses on market direction and timing rather than magnitude
of price change. Key challenges in advanced cycle spectrum analysis (as implemented in Timing Solution)
include Discrete Fourier Transform (DFT)-based spectral decomposition
of price data into dominant cycles, which typically requires at least 3
years of daily observations for 30-day forecasting, with more than 5
years being optimal; pattern recognition; construction of composite
cycle projection lines; and identification of initial directional biases
for the upcoming month. There is also the inverse pattern, which is currently not favored by Nicholas Savino.
Reference:
Monday, April 27, 2026
S&P 500 Dumb Money Confidence Enters Extreme Optimism | Alex Krainer
S&P 500 Dump Money Confidence (red line) has risen above 70%, signaling extreme optimism historically linked to consolidations or pullbacks. Meanwhile, the CNN Fear & Greed Index sits at 67 (Greed), and Smart Money Confidence (blue line) stays perfectly neutral at 50% ahead of this week's major news, rates, and earnings.
This is not a bearish crash call but a contrarian warning. Dumb
Money Confidence above 70% often marks
trend exhaustion—leading to sideways trading, 5–10% pullbacks, or simply pauses
before quarterly earnings. These sentiment indicators are statistically reliable
over decades but can't time exact market tops.
Sunday, April 19, 2026
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.
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.
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.
Thursday, April 16, 2026
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.
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.
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.).
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