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 & VALUA
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.
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 case for a strong year—consistent with what we’ve observed so far. The Kitchin cycle also points to an overall upward trajectory, with the next cyclical peak expected around April 2027.
However, both the Presidential Cycle and the January Barometer are signaling potential weakness as we move into November and December. In contrast, my current forecasts still favor another leg higher into mid-November, followed by a transition into a sideways phase that may carry through to month-end.
Mid-Term View
As we approach the end of November, it appears this year will be among the ~40% in which the month finishes lower than it began. At this point, it would take a rally of over 200 points to flip that outcome—technically feasible, but statistically unlikely given the current setup.
This also serves as a good opportunity to again highlight the Dow Jones Utility Index (DJU) and its continued value as a forward-looking signal. While I haven’t measured the precise length of previous directional moves, its historical consistency suggests that if the pattern holds, further weakness could extend into next week, with a potential recovery emerging in the early days of December.
Looking at the broader index, the SPX posted a new short-term low that dipped slightly below its October 10th level. While not dramatic, it’s a noteworthy marker in the current context. Meanwhile, on the SPX Equal Weight (SPXEW) chart, I’ve maintained the Head & Shoulders pattern with the neckline clearly drawn. The recent turn appears technically consistent with a pullback, which—if the pattern holds—could see the index retest the neckline from below in the sessions ahead.
Sector-wise, it’s important to clarify that the XLP trendline in the chart is inverted. So while it may appear to be breaking down, the actual interpretation is a show of strength in consumer staples—a classic sign of defensive rotation. Capital moving into staples often reflects growing caution beneath the surface. In contrast, XBD, which was already flagged in last week’s commentary, has resumed its decline after a brief pause. The combination of rising defensives and falling broker-dealers has historically, though not always, preceded turning points in broader market direction. While it doesn’t pinpoint timing, it remains a setup worth tracking.
Lastly, the monthly forecast had called for sideways action beginning mid-month. The model now reads as broadly neutral, offering little additional edge in either direction given the current conditions.
Short-Term View
Technically speaking, the trendline should have been adjusted on the 18th to reflect the shift from an uptrend to a downtrend. The lower high established on the 12th, followed by a lower low on the 18th, confirms the transition. However, the current system of using derived slower and faster trendlines tends to lag during turning points, making it less effective in identifying the establishment of new trends in real time. That said, the previous uptrend line has continued to offer relevance, marking areas where short-term reactions have occurred.
On Friday, the index closed on an even slower trendline, forming a white candle—suggesting the potential for a short-term bounce, at least in the early part of the week. I’ve highlighted in red two areas on the chart that share similar characteristics. Whether the market follows the same script remains to be seen. My base case leans toward a repeat of that behavior, though I suspect the index may need to dip slightly below Friday’s low before a more sustained move higher can develop.
Regarding the Open Interest (OI) Heat Map, I’m still working on resolving the technical issue that’s preventing Friday’s candle from appearing. However, this doesn’t impact the chart’s overall utility. OI remains heavily concentrated on both sides of the current price, but the downside appears less obstructed. In contrast, the path upward faces immediate resistance around the 6,990–6,750 range. This level could act as a short-term magnet, drawing prices higher before a potential reversal into the 6,550–6,450 zone.
As for volatility, the VIX has entered what I label the “Caution Rising” zone. I haven’t added a trendline here, as the uptrend is visually clear. These observational zones serve as both support and resistance levels. For a confirmed reversal in sentiment, I would want to see a candle close back inside the “Normal” zone. As it stands, this setup lends additional support to the view that further downside may persist into next week.
What’s Ahead
In the final week of November, the market transitions from Earnings Season to the less celebrated—but equally impactful—earnings warnings season, where forward-looking statements often carry more weight than past performance. With no options expiration on the calendar, one of the usual sources of short-term volatility is off the table. However, attention may turn to monthly inflows and outflows, which could start to influence price action—particularly in the latter part of the week as asset managers position around month-end. Additionally, U.S. markets will be closed on Thursday, November 27th for Thanksgiving, and will operate on a shortened schedule with a 18:00 UTC close on Friday, November 28th.
EVENTS
- 25th November 2025 PPI
- 26th November 2025 13:30UTC Initial Jobless Claims
- 26th November 2025 13:30UTC Personal Income & Spending
- 26th November 2025 13:30UTC PCE Price Index
Outlook & Expectations
My long term charts are hinging down, medium term charts are already going down. I do not have a setup for a 20% retrace in the Markets, I would add “unfortunately” but weakness could persist into the new week. If it does possible target is around 6648 with a possible pause or change of direction back up on the 18th (November DOI). If it does bounce back up on Monday I would be looking maybe for a powerful recovery back to 6896 always keeping in mind the 18th as a date where a possible change of direction or pause may start.
There was no bounce on Monday, prompting a shift in the target to $6,648—a level that was reached around the 18th, where a pause or potential reversal had been anticipated. A brief consolidation followed, lasting through the 19th, before downside momentum resumed. The price action on the 20th served as a textbook example of “buy the rumor, sell the news,” with a sharp intraday move that likely caught late long entries off guard. A rebound attempt appeared on the 21st, suggesting some stabilization. The week ultimately closed at $6,602, aligning more closely with the third level of Open Interest support from the prior week, marked at $6,596.
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.
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!
