Long-Term
Decennial Pattern & Performance
The table averages market performance for each calendar year ending in the same digit and shows how often those years closed up or down. We’re now in a year ending in 5, which has historically been the best-performing of the lot. Out of nine such years, the market closed higher eight times.
Please note that the up/down counts in the table reflect only the direction of the yearly close and do not distinguish between small or large gains or losses. A year marked as “up” may include increases as minimal as 0.1%.
| 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | |
| Avg % | 1.34% | 1.38% | 0.64% | 16.27% | 7.97% | 22.05% | 9.41% | 1.49% | 10.07% | 10.37% |
| Up/Down | 5/5 | 5/5 | 6/4 | 8/2 | 7/3 | 8/1 | 7/2 | 6/3 | 7/3 | 7/3 |
Kitchin Cycle
The Kitchin Cycle is a short-term business cycle lasting approximately 40.68 months, or about 3.4 years. First identified by economist Joseph Kitchin in the 1920s, it reflects recurring fluctuations in production and inventories. These cycles are driven by delays in information flow and business decision-making — companies respond to market signals with a lag, often overcorrecting by overproducing or underproducing. The result is a rhythmic, short-term economic pulse, distinct from longer cycles like Juglar or Kondratiev waves. Source: Technical Analysis Explained – Martin J. Pring.
| Last Forecast Date | Type | Actual Date | Actual Direction | Next Peak | Next Valley |
| 09/04/2025 | Valley | 07/04/2025 | Up untill next peak | 23/04/2027 | 08/12/2028 |
Presidential Cycle
Post-Election Year (Year 1):
The first year after an election often begins on a shaky footing. Investors face uncertainty as the new or continuing administration rolls out its agenda, which can spark heightened volatility. Markets tend to struggle in the early months, moving in a sluggish, uneven fashion before finding a firmer footing into late spring and summer. That rally phase is usually short-lived, as the market frequently rolls over into a sharp correction in the autumn months. By the end of the year, however, stocks often stabilize and manage to recover a portion of the earlier decline, leaving the overall year mixed or modestly positive.
Midterm Year (Year 2):
The second year is historically the most difficult. The weakness from late in Year 1 can spill over, and the first half of the year is often dominated by hesitancy, uneven growth, or outright declines. Political uncertainty around midterm elections tends to weigh on sentiment, while policy adjustments or tighter monetary conditions can add to the pressure. The turning point usually comes in the latter part of the year. By autumn, markets often carve out an important low, setting the stage for a strong rebound in the final quarter, as election results bring clarity and forward-looking investors position for the next phase of the cycle.
Pre-Election Year (Year 3):
The third year of the cycle is typically the strongest. The environment is generally characterized by policy support, as administrations often encourage growth and stability ahead of the coming election. Markets tend to respond with steady, broad-based advances that can last through much of the year. Pullbacks do occur, but they are usually shallow and quickly reversed, as the dominant tone is constructive. Investor confidence tends to be high, liquidity conditions are often favorable, and risk appetite expands. This combination makes Year 3 the most consistent bull phase of the four-year pattern.
Election Year (Year 4):
The final year of the cycle carries a more complex personality. The bullish momentum from Year 3 often extends into the opening months, but as campaigning heats up and polls shift, the market can grow unsettled. Volatility becomes more pronounced, with swings tied to election headlines, policy promises, or unexpected political developments. Despite this choppiness, the underlying trend tends to remain positive. Once the outcome of the election becomes clearer, markets usually regain their footing and push higher into year-end. Though less robust than Year 3, Election Years still often deliver respectable gains.
January Barometer
This is a modified interpretation of the classic January Barometer originally introduced by Yale Hirsch, which states: “As goes the S&P in January, so goes the year.” In this version, the focus shifts away from absolute direction and instead emphasizes potential inflection points, changes in trajectory, and the steepness of price movements. The directional bias of individual segments is intentionally disregarded, as historical reliability on that front remains questionable.
The core concept involves extrapolating January’s behavioral pattern across the entire calendar year — essentially “stretching” the market’s movements from January and projecting that rhythm through to December, as a framework for observing possible structural or psychological echoes in market behavior.
My Yearly Market Blueprint
This represents my yearly forecast. As noted earlier, the projected turning points have shown a reasonable degree of reliability — though, regrettably, the same cannot be said for directional accuracy. The blue line reflects the original forecast published in December 2024, the green line marks the revised outlook, and the red line tracks actual market behavior. Updated at EOM.
Mid-Term
Seasonal Patterns
Source: The Research Driven Investor by Timothy Hayes
The chart below illustrates the stock market’s seasonal tendencies — its historical propensity to rise or fall during each calendar month. We’ll use this as the primary basis for establishing a mid-term directional bias.
Note: While the chart on the left is based on the Dow Jones Industrial Average, the accompanying monthly performance table reflects data from the S&P 500. Similar to the yearly performance table above, keep in mind the usual caveats — seasonal patterns can inform bias, but they’re far from guarantees.
| JAN | FEB | MAR | APR | MAY | JUN | JUL | AUG | SEP | OCT | NOV | DEC | |
| Avg. | 1.2% | -0.2% | +0.4% | +1.1% | 0.0% | +0.9% | +1.4% | +0.5% | -1.1% | +0.5% | +0.9% | +1.2% |
| % Up | 61% | 53% | 60% | 62% | 61% | 58% | 61% | 58% | 46% | 58% | 60% | 73% |
Sector Signals and Relative Strength
DJU
The Dow Jones Utilities Average (DJU) is used here as a leading indicator for potential weakness in the broader equity markets. While I can’t recall the original source of this idea, I’ll be sure to credit the author if and when it comes back to me. Through observation and analysis, I’ve found that the DJU often signals prolonged periods of market weakness approximately three months in advance of major indices like the S&P 500. This lead time is an average — typically around 55 trading days — with a buffer of roughly ±1 week to account for variability.
SPXEW
Historically, divergence between the S&P 500 and broader measures such as the S&P 500 Equal Weight Index (SPXEW) has often served as an early warning signal for upcoming corrections in the S&P 500. While the S&P 500 is weighted by market capitalization, giving more influence to the largest companies, the SPXEW treats all 500 constituents equally, offering a more balanced view of overall market participation. These divergences tend to be more reliable when signaling tops rather than bottoms. Tops usually form gradually, allowing time for divergences to emerge. Bottoms, however, are often sharp and “V”-shaped, giving little warning. As a result, while this method can help identify downside risk, it’s far less effective at spotting recoveries or timing market lows.
XBD/SPY & XLP/SPY Relative Strenght
Source: Technical Analysis Explained – Martin J. Pring
Relative Strength (RS) is a technical metric used to evaluate the performance relationship between two securities. In the chart, we compare XBD (Securities Brokers – blue line) and XLP (Consumer Staples – inverted, orange line), both measured relative to the SPY.
Starting with XLP/SPY: XLP represents the Consumer Staples Select Sector SPDR. The underlying premise is that during bear markets, investors often seek refuge in consumer staples due to their defensive nature. Conversely, in bull markets, these stocks tend to underperform as capital shifts toward higher-growth, more speculative sectors. For this reason, the XLP/SPY line has been plotted in an inverted format, allowing for easier identification of divergences that often signal shifts in investor sentiment.
Now, turning to XBD/SPY: XBD represents the NYSE Arca Securities Broker/Dealer Index. Historically, this index has shown a tendency to lead market tops and bottoms. When the relative strength line peaks and begins to decline or move sideways, it often precedes a change in market trend—though the timing can vary. This change may result in a downturn or simply a period of consolidation. The inverse also holds true, with the index providing useful signals near market bottoms as well.
Monthly Forecasts
NOVEMBER
At this stage, there isn’t much to add in terms of high-conviction signals for November. The current upward momentum may extend into the 6th, after which a consolidation or digestion phase could emerge, potentially lasting through the 10th.
From there, another leg higher is anticipated, likely carrying through to around the 18th, coinciding with the conclusion of the earnings-driven momentum. Beyond that, the market may shift into a more prolonged sideways phase, which could persist through the end of the month.
NOVEMBER’s DOI: 6th-10th, 18th.
In reference to the November outlook, forecasts initially anticipated a continued upward trend from October, with some expected turbulence between the 6th and 10th, followed by a shift from an upward to a sideways trajectory around the 18th. Now that the chart has been updated, it’s evident that while the directional forecast was inaccurate—as previously noted—the projections regarding timing of volatility were surprisingly precise. Instead of a rise, the market experienced a continued decline from the final days of October, with a brief retracement occurring between the 7th and 12th—coinciding with the anticipated period of turbulence—and a further decline until the 20th, when a directional shift occurred slightly later than the forecasted 18th. Once again, the chart has demonstrated a degree of reliability in identifying potential turning points, even if the directional bias was off.
DECEMBER
The December forecast suggests a relatively flat month overall, with a period of market indecision expected between the 16th and 18th. The projected directional bias is to the upside, with the month—and the year—anticipated to close with some mild weakness in the final trading days.
DECEMBER’s DOI: 16th-18th.
DOIs: “DOI” refers to “Date of Interest” — a term used to highlight specific days when potential market reversals or periods of heightened volatility may occur. The methodology behind the identification of these dates has not been disclosed in previous publications and will remain confidential in future ones.
Short-Term
S&P500
This chart employs a simple yet effective methodology for identifying theoretical support and resistance zones. It calculates key levels based on fixed percentage moves from both the most recent significant high or low, as well as from the extreme points — either the lowest low or highest high — within the current trend structure. Additionally, it factors in speed deviations, both positive and negative, relative to the prevailing trend. These elements serve to identify potential zones where price action may stall, reverse, or accelerate, providing a structured framework for anticipating significant market reactions.
This chart displays a heat map of potential support and resistance levels derived from open interest in SPX options. The analysis takes into account various option characteristics, including expiration dates, moneyness, and strike distributions. The specific parameters and selection criteria have been determined at the author’s discretion and are not disclosed.
Darker areas on the heat map indicate a higher concentration of open interest, which may signal zones of market sensitivity. It’s worth noting that a significant portion of open interest—particularly in out-of-the-money puts below the current market price—is often used as part of hedging strategies by institutional participants and market makers. While these levels can act as potential areas of support or resistance, they should be interpreted as context rather than certainty, as not all open interest reflects directional intent.
VIX
For the VIX, I primarily focus on trendlines and channels, using closing or opening prices rather than highs or lows. I avoid indicators — the VIX tends to respect structure more than signals. The colored levels on my chart are straightforward: they serve as both support/resistance zones and trigger levels, depending on price behavior.
Summary
Long-Term View
The Decennial Pattern and broader annual performance continue to support the outlook for a strong year, aligning with market behavior observed thus far. Similarly, the Kitchin cycle suggests an overall upward trajectory, with the next cyclical peak anticipated around April 2027.
While the Presidential Cycle still indicates potential weakness, there has been no significant correction to date. As we near year-end, some degree of market stabilization can be expected in December. The January Barometer points to a slightly negative month, with an early rally followed by a decline into month-end. Meanwhile, the Yearly Market Blueprint suggests a sideways trend for December, with a potential upswing developing in the second half of the month.
Mid-Term View
November has officially closed, landing among the 40% of instances where the month ends in negative territory. While the decline wasn’t significant, it did fall well short of the historical average gain of +0.9%. Looking ahead, December historically closes in positive territory 73% of the time, with an average return of +1.2%. It’s worth noting that even a modest +0.1% finish would count as a positive close for the month.
The DJU index is now approaching its prior bottom from September 8, 2025—suggesting that the current phase of weakness may be nearing its end. As a reminder, this cycle typically spans around 55 candles, give or take a week. While the December 21st low could theoretically mark the bottom, this tool isn’t intended for precise timing; rather, it serves as a gauge of underlying market weakness, alongside other elements in this analysis.
As a reminder, the SPXEW/S&P500 chart becomes largely irrelevant when there’s no divergence between the two indexes. In those cases, I typically use it simply to see if any additional signals can be spotted elsewhere.
On the SPX Equal Weight Index (SPXEW), I’ve marked what appears to be a head-and-shoulders pattern. The index broke below the neckline, triggering a sharp drop—followed by an equally sharp recovery that ultimately closed above the previous high, as highlighted by the horizontal orange line. That said, an uptrend only confirms when higher highs are followed by higher lows; the latter is still missing in this case.
On the S&P 500, I’ve noted a broadening formation—essentially two diverging trendlines containing the price action. There are countless names for such patterns, but the essence remains the same. The index did manage to close above the upper trendline, yet it has not posted a new higher high, meaning we are technically still within a downtrend for the S&P500.
As for sector signals, both XBD and XLP trendlines remain in decline. There was a tentative bottom around November 20, but this has yet to be confirmed. For now, the trend remains downward.
Finally, the monthly outlook still points to a sideways start to December, followed by a potential rally around mid-month.
Short-Term View
The long-term trendline remains in place, as it continues to serve as a reliable indicator of potential support and resistance zones—effectively highlighting key “walls” and “holes” in price action. Two areas of similar price behavior have been marked in red; if this pattern holds, a minor retracement could be anticipated in the upcoming sessions.
Looking at the Open Interest (OI) Heat Map, overlaying last week’s candlesticks reveals how those levels acted as effective magnets for price movement. For the current week, the trading range has narrowed, accompanied by a decline in the VIX—something I’ll touch on shortly—suggesting limited momentum and reduced potential for significant moves. Price is currently hovering just below a dense cluster of OI slightly above current levels. It’s also worth noting areas of interest slightly below, around the 6750 and 6650 levels, which may exert some pull.
The VIX briefly rose into the “Caution Rising” zone before retreating over the course of the week, settling back into the 15–16 range—a level that has provided support for price action over the past several months.
What’s Ahead
We are currently in the midst of earnings warning season, a period that can introduce increased headline risk and market sensitivity to corporate guidance. With no major options expirations scheduled, that particular source of volatility is absent for the time being. However, early-week price action may still be influenced by typical monthly inflows and outflows as capital reallocation plays out. Additionally, the absence of any market holidays ensures uninterrupted trading sessions throughout the week.
EVENTS
- 02nd December 2025 01:00UTC FED CHAIR Powell Speech
- 04th December 2025 13:30UTC Initial Jobless Claims
- 05th December 2025 15:00UTC Personal Income & Spending
- 05th December 2025 15:00UTC PCE Price Index
Outlook & Expectations
For the week ahead, the current scenario suggests a potential bounce that began on Friday may extend through to Tuesday. During this time, price action could retest the retracement level from the recent high at 6,649, or even push into the clustered zone of extension levels and Open Interest (OI) resistance in the 6,691–6,699 range. From there, possibly as early as Wednesday, the market may resume a downward leg that could extend into the first days of December—potentially bottoming around the 3rd, at which point a stronger uptrend may begin to take shape.
I’ve marked a key level on my chart at $6,759. A daily close above this threshold would effectively invalidate the current bearish outlook and shift the bias. Should that occur, the upside move could be sharp, given the notable gap between current prices and the next major OI resistance levels. Until then, the base case remains cautiously tilted toward another short-term pullback before any sustained upside can develop.
The weekly bias initially leaned slightly bearish, but this outlook shifted on Wednesday when, instead of continuing lower, the market closed above the key $6,759 level—prompting a tilt toward a more bullish expectation. A sharp upside move followed, in line with the prior week’s forecasts, and was confirmed by a nearly 200-point gain around the Thanksgiving period. However, the rally occurred on low volume and during shortened sessions, reflecting limited participation. Under regular trading conditions, a stronger follow-through would have been a reasonable expectation.
For the upcoming week, I expect the market to continue following the trajectory established over the past several sessions. A more reliable signal should emerge around December 2nd, which is likely to offer greater clarity on whether a retracement is developing or if the upward trend will extend into mid-month. Should a decline begin around that date, a sharp but potentially brief move—lasting 2 to 3 days—could take the market down to test OI support levels at 6,746 or possibly as low as 6,648. On the other hand, if the downside scenario fails to play out, immediate resistance lies at the prior high from November 12th, 2025 at $6,869, followed by the next key level at $6,920 from October 29th, 2025.
As we approach the end of the year, I’d like to take a moment to mark a personal milestone: this blog has officially completed its first year. What began as a simple trading diary—a place to organize my thoughts and track market behavior—has grown into something much more. It’s been rewarding to see it evolve and to know that others have found value in the work shared here.
Looking ahead, I’m genuinely excited about what the next year might bring. That said, I’m not under any illusions—continuing this project requires a real investment of time and energy, and like anyone else, I have other priorities in life that sometimes take precedence. So while I aim to maintain consistency, please don’t expect a post every single week. As it stands, 49 posts over 52 weeks is a record I’m more than satisfied with, and one I’ll strive to keep up—realistically, not rigidly.
I also want to take this opportunity to express my sincere thanks to the three supporters who have contributed financially to this blog. Your support has been genuinely appreciated, and it won’t be forgotten. If a paid service or expanded offering ever does take shape in the future, your early support will absolutely be taken into consideration.
Thank you to everyone who reads, follows, and continues to engage. Let’s see where the next year takes us.
Just a reminder: if you’ve landed on this page and immediately scrolled to the bottom hoping to find a quick answer to “what the market is going to do,” you’re out of luck. There’s no magic line here. My approach is deliberately two-dimensional—designed to manage both financial and psychological capital. I understand the probability landscape between potential scenarios, but you won’t grasp that unless you’ve read the analysis above and have been following along for a while.
If you’re just here to speculate and want a shortcut, feel free to reach out—my fee is 99% of your net gains (post-tax), since your effort probably only accounts for the remaining 1%. Relax, I’m joking—I would never trade someone else’s money. The effort it takes just to break even by year-end is immense; beating a major index is an entirely different league. If you genuinely believe someone’s going to hand you the keys to financial freedom with zero effort, you shouldn’t be here reading this—especially since it’s free, and blissfully free of ads. Go pay an “expert” and keep convincing yourself you’ll crush it.
If this article sparked a brain cell or two, you can say ‘Thanks’—ideally while caffeinating and pretending you’ve got this whole Market thing figured out. Consider buying me a coffee. It keeps this site running and caffeine flowing!
