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

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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

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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.

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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.

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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.

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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.

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Mid-Term

	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%

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Sector Signals and Relative Strength

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Monthly Forecasts

OCTOBER

To be honest, I don’t have “real” DOIs for October beyond the 2nd. What I see is a rise stretching into the 23rd, where we could hit a digestion phase—basically sideways action as profits get taken till the 29th were another leg up may take place. Those ranges I’ve marked are what I’d call turbulence dates: spots where I expect 1–2 candles to move against the main trend before the uptrend resumes within 3–4 candles. Eventually, this strong run will need to correct downward and shed some profits, but I suspect that won’t show up until the first week of November. So for October, think of those dates as either digestion points or possible reversals—it’s your call which one plays out.

OCTOBER’s DOIs: 2nd, 7th–9th, 15th–17th, 23rd, 29th.

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

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Summary

Long-Term View
The broader outlook remains positive, though two key seasonal indicators — the Presidential Cycle and the January Barometer — are flashing potential for a sharper correction heading into autumn. While not predictive in isolation, both suggest Q4 may come with increased volatility and a possible inflection point.

Mid-Term View
Seasonality continues to suggest a period of weakness during the middle of the month. The Dow Jones Utilities (DJU) Index began its decline in early August, and we are now nearing the end of the typical three-month window—an interval that historically precedes broader market softness, adding further bearish sentiment to the current outlook.

Divergence between the S&P 500 Equal Weight Index (SPXEW) and the S&P 500 (SPX), previously noted in earlier commentary, has become less relevant given the recent price structure, and no longer contributes meaningfully to the broader picture. At present, the market has printed a lower high, with a lower low still pending. The September 26th level provided support into Thursday’s close. While not previously emphasized, if the index were to see a modest near-term rise, the current structure could begin to resemble the early stages of a diamond top formation.

Sector-wise, the top in the Broker-Dealer Index (XBD) remains intact from earlier this year, and Consumer Staples (XLP) appears to have also peaked—unless an unexpected upside move invalidates that view. These signals collectively point to proximity of further weakness.

The forecast set at the beginning of October anticipated a strong upward move through the month, with potential turbulence around the 7th–9th and 15th–17th ranges. A resumption of upside momentum was projected to begin around the 23rd; however, given the current conditions, there is now a growing possibility that the expected upward leg may instead be replaced by renewed downside pressure.

Short-Term View

The primary trend is currently acting as a dynamic resistance level, while the slower trend (represented by the thin blue line) continues to offer support. Price is approaching the 6707 level (marked by the purple line), which aligns with notable resistance just above the current close—also confirmed by the Open Interest (OI) Heat Map. The Heat Map reflects a broadening range, indicating that market participants are expecting increased daily volatility. Resistance is positioned immediately overhead, while support lies lower and would require the market to retrace some of the gains made earlier in the trend.

Additionally, the VIX closed higher on Thursday, entering what I refer to as the “Caution Rising” zone—an area that typically reflects elevated risk conditions. For reference, I’ve retained the orange-colored line that previously highlighted divergence, along with the downward-sloping trendline, which marked the point where that divergence concluded on October 10th and has since lost relevance.

What’s Ahead
This week unfolds within a relatively neutral macro calendar backdrop. It is earnings season, which remains the primary driver of market activity. There are no major holidays impacting trading hours, no significant options expirations scheduled, and no end-of-month flows to influence liquidity or direction. As a result, price action is likely to reflect pure corporate performance and positioning, with fewer external catalysts distorting market behavior.

EVENTS

• 23rd October 2025 12:30UTC Initial Jobless Claims
• 24th October 2025 12:30UTC Inflation Rate
• 24th October 2025 12:30UTC CPI

Outlook & Expectations

Yes, posting a day early, thanks to what’s shaping up to be a longer-than-usual weekend on my end. This update will cover tomorrow, Friday, and the outlook into next week.

Momentum may slow a bit here, as earnings season plays its usual game—keeping shareholders content… until it doesn’t. Did you catch the reaction to the big bank reports? Exactly—what reaction? The market barely blinked. At these price levels, who’s really buying? Certainly not me. I’ve already had to swallow a 30% increase in my music streaming subscription over the past two years—so no, I’m not chasing overpriced equities while inflation plays hide-and-seek in the official stats. If this is the so-called “buying season,” someone forgot to bring the discounts.

Maybe this reluctance is still hangover from that sharp decline earlier in the year? Possible. But frankly, I’m not convinced. I could be wrong—but my base case is a market correction sometime between the end of October and the first week of November, something deeper than a 200-point dip and with more staying power than a one-day, headline-driven move.

Looking to next week, I’ve flagged the 23rd as a potential day of interest (DOI). That doesn’t necessarily imply downside. In fact, we could see a bounce begin as early as tomorrow, with some downward pressure tied to options expiry. I’d expect choppiness to continue until around the 22nd, where we may see bullish momentum build. For the next potential leg down, I’m watching around the 27th.

As I’ve noted before, I don’t factor politics or macro headlines into this space—just the charts. If you’re looking for a post-mortem on why price moved up, down, or nowhere at all, there’s no shortage of pundits and free content for that. And yes, I took a hit on Monday too. You’re not alone. I insured my capital—same way I pay my car insurance each year.

To remind myself more than anyone else: technical weakness comes first. News can act as a catalyst, sure, but if the charts aren’t primed for a move, it’s not happening. It almost never works the other way around.

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

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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

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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.

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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.

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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.

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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.

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Mid-Term

	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%

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Sector Signals and Relative Strength

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Monthly Forecasts

OCTOBER

To be honest, I don’t have “real” DOIs for October beyond the 2nd. What I see is a rise stretching into the 23rd, where we could hit a digestion phase—basically sideways action as profits get taken till the 29th were another leg up may take place. Those ranges I’ve marked are what I’d call turbulence dates: spots where I expect 1–2 candles to move against the main trend before the uptrend resumes within 3–4 candles. Eventually, this strong run will need to correct downward and shed some profits, but I suspect that won’t show up until the first week of November. So for October, think of those dates as either digestion points or possible reversals—it’s your call which one plays out.

OCTOBER’s DOIs: 2nd, 7th–9th, 15th–17th, 23rd, 29th.

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

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Summary

Long-Term View: Constructive but Cautious
The broader outlook remains positive, though two key seasonal indicators — the Presidential Cycle and the January Barometer — are flashing potential for a sharper correction heading into autumn. While not predictive in isolation, both suggest Q4 may come with increased volatility and a possible inflection point.

Mid-Term: October Weakness Lingers
Seasonally, markets tend to struggle into mid-October, with historical data showing the month closes higher 58% of the time, averaging a modest +0.5% return. However, the Dow Jones Utilities (DJU) — often a leading barometer for corrections — are signaling downside risk around October 22nd, potentially followed by a recovery phase into late November (around the 24th).

Index Technicals: Divergence and Trendline Violations
Both the S&P 500 (SPX) and its equal-weight counterpart (SPXEW) have posted strong multi-month gains, increasing their divergence — a sign of narrowing leadership. Recently, both indices closed below a key ascending (non-horizontal) trendline, suggesting potential weakness in underlying market breadth.

SPXEW, however, just broke out of a short-term consolidation and erased a minor negative divergence, though the S&P 500 continues to advance at a notably faster pace — underscoring the current momentum advantage of mega caps over the broader market.

Sector Indicators: Mixed Sentiment Signals
The XBD/SPY ratio — a financial sector proxy — has been in decline since peaking months ago, and while not currently reliable as a leading indicator, it does reflect softening risk appetite. Conversely, the XLP/SPY ratio (staples vs. broad market) recently spiked, suggesting a defensive tilt among institutional flows.

Friday’s Price Action: On the Edge of Structure
Friday’s close landed almost exactly on the main trendline — visually on it, though technically just a few dollars below. This could imply increased fragility in the near-term structure. Open Interest (OI) Heat Maps currently show limited support until the 6400–6300 range, which may act as a gravitational pull if weakness persists.

Volatility Watch: VIX Breaks Structure
The VIX closed outside and above its recent channel, entering the “caution rising” zone — an early warning signal that hedging demand is increasing. While not yet at panic levels, the move warrants attention.

What’s Ahead: Earnings Season Begins Amid Quiet Macro
Looking ahead, markets enter the new week at the start of earnings season. There are no major holidays, end-of-month flows, or significant macro events on the calendar. However, monthly options expiration looms, which could introduce positioning-driven volatility.

EVENTS

• 14th October 2025 16:20UTC Fed Chair Powell SPeech
• 16th October 2025 12:30UTC Initial Jobless Claims
• 16th October 2025 12:30UTC PPI
• 16th October 2025 12:30UTC Retail Sales

Outlook & Expectations

Market is always a puzzle and we try to make sense of it, it’s not just about identifying patterns, but about maintaining awareness — awareness of the broader context behind the moves.

Yes, we had a decline on Friday. Yes, mid-term charts were already extended, and yes, the long-term structure may simply be pausing, not breaking. But here’s the key point: Friday’s drop wasn’t purely technical — it was news-driven, with a layer of technical fragility underneath. It’s a classic “sell the news” setup, after a long stretch of rumor-driven optimism.

Given that context, a bounce wouldn’t be surprising. If price holds or stabilizes near the 6300–6400 zone, we could see a reversal as soon as Tuesday or Wednesday. That area has come up before as a meaningful level, and it still looks like a reasonable place for the market to attempt a reset.

But here’s where things get tricky: even if we get that bounce, it may not resolve the bigger picture. A weak recovery could just build the right shoulder of a lower high — a setup that often precedes a trend change. The question becomes: will this bounce be the start of a new leg up, or the beginning of a broader, more persistent downtrend?

We don’t know the full answer yet — and we don’t need to. What we do know is that if weakness continues and price moves decisively below 6300, there’s a strong possibility we head toward the February 2025 high around 6200. Timing-wise, DJU’s seasonal pattern suggests a correction could play out into late October. If that happens, it could mark a window to begin preparing for a more favorable entry — the kind of “discount season” long-term investors tend to look forward to.

This market is a moving target — part technical, part narrative, and increasingly psychological. The short-term decline feels event-driven, not structural (yet). But how the next bounce behaves — strong follow-through or a lower high — will set the tone for the weeks ahead. Stay flexible, stay aware, and keep the shopping list ready.

Yep, the website has had a facelift. I’m still fumbling around with the new setup, not just on the look but on the structure of each weekly article too. It’s a lot of work—and just to remind you, I’m doing this for free. Some weeks you’ll get the full spread, some weeks it’ll be a slimmed-down version. Discipline isn’t about perfection; it’s about showing up and doing what you can. So yes, the old articles might look a bit off now—fonts mismatched, spacing weird—but this isn’t some polished $X/month subscription with pretty graphics. It’s just me, a normal human being in a chair, sharing my view of the Market. Never claimed perfection, never will.

This week most of my time (and then some) went into building the new structure for the articles. That means this update will be short and to the point. Remember the triangle I flagged as our sandbox last week? The top was R2 at 6724. As I type, the Market’s sitting at 6729, just a few hours before close. Loved seeing it poke above R2 only to get smacked right back down. If we close anywhere within ten bucks of 6724, I’ll call that a good hold.

What about next week? Well, we just passed the 2nd of October (a DOI on my list). I didn’t have time to crunch fresh S/R levels, but if I were you, I wouldn’t delete that trendline from your charts just yet. My gut says turbulence inbound—maybe a dip starting Monday, then a reversal higher around the 8th. That’s me eyeballing it in about three minutes.

See you next week—hopefully with the upgraded format finally live.

Seasonal Context & Events

We’re in “earnings warnings” mode now (read below if you missed the memo). No options expirations on deck, no holidays to shorten the week, but what could matter more is the flow of money. With the third quarter ending and the fourth about to kick off, monthly inflows and outflows could get chunky. And let’s not forget what Martin J. Pring reminded us: we’re stepping into the historically best five consecutive months for the Market. Context matters.

Key events include:

• 30th September 14:00UTC JOLT’s Job Openings
• 02nd October 12:30UTC Initial Jobless Claims
• 03rd October 12:30UTC Unemployment Rate

Those events may or may not influence the opening direction and subsequent days.

The Trading Week Recap

Nothing special to highlight this week, if not a little change in the terminology used in the “Season Context & Events”.

Really never liked how to define the season were the are no earnings been released but thanks to Brian Shannon I’ve got the solution.

Copy-pasting from his book:

Earnings season actually begins with “earnings warnings” about two to three weeks before the actual results are publicly released. As a company realizes that their results might fall short of what they previously indicated, they try to get the news out to the market quickly by issuing a “warning.” These warnings take many participants off guard and are dealt with quickly, often severely as shareholders rush for the exits all at once. While earnings warning only speeds up the markets’ reaction to the news, it is a tradition on Wall Street that helps the reporting company to be “trusted” in bad times. It also helps the time it takes for the stock to recover from such a violation.

What does that mean for you? From now on, every end-of-quarter month gets labeled “earnings warnings.” Cleaner, easier, and it saves us all from the usual dumb back-and-forth: “We’re not in earnings season anymore,” “two weeks until earnings season starts again,” and so on. Done deal.

That’s it for this week.

P.S. I’m also putting together a reference page for readers—basically a cheat sheet on what goes into the Seasonal Context & Events section and why, since those checkpoints never really change.

What happened last week? Forecasts reported:”Either we push back into the R2–R3 range, or we dip to test that trendline and then bounce back toward R1.”.

Well, we got a bit of everything—first the push to R2, then the trendline tap, and finally a bounce. Should’ve reminded myself the 19th was on September’s DOI list… rookie move.

Support & Resistance Levels

R3	6772
R2	6724
R1	6696
Close	6643
S1	6537
S2	6523
S3	6422

Forecasts

Trendline’s still there—you know the drill: green for support, red for resistance. But now there’s also a shaded zone and a purple line. What are those? Let me explain.

We’re at quarter’s end, and the first days of October tend to be wild. Pretending I’ve got a precise forecast here would be like pretending I know what I’m doing (spoiler: I don’t). So that shaded area (shows up green on my screen) is basically where I expect the Market to mess around next week. And the purple line? It connects the 17th and 25th candles—eerily similar shapes. I’m curious to see if that level decides to matter in the days ahead.

So, no “official” forecast this time—just a wide sandbox. That said, I wouldn’t be shocked if next Friday’s weekly candle turns out white (size TBD). Any close under that trendline, though, and you’ll hear alarm bells going off in my head.

End of Month

Quick forecasts recap:

Here’s the rough sketch: a possible rise into the 8th, stall out there, then a pullback that could drag into the 15th. After that, maybe another push up toward the 19th, and then a slide again into month’s end.

We got the rise into the 8th where I was expecting a stall—but nope, that never showed up. Instead, we just kept pushing higher. Between the 15th and 19th, not much happened—call it a pause at best. The slide I had penciled in for the 19th didn’t actually kick off until the 23rd (two candles late), and the bounce showed up one candle earlier than forecast, last Friday instead of the 29th. So, first half of the month? Meh. Second half? Much better—both for the forecasts and for my account.

Now, what about October?

DOIs: 2nd, 7th–9th, 15th–17th, 23rd, 29th.

To be honest, I don’t have “real” DOIs for October beyond the 2nd. What I see is a rise stretching into the 23rd, where we could hit a digestion phase—basically sideways action as profits get taken till the 29th were another leg up may take place. Those ranges I’ve marked are what I’d call turbulence dates: spots where I expect 1–2 candles to move against the main trend before the uptrend resumes within 3–4 candles. Eventually, this strong run will need to correct downward and shed some profits, but I suspect that won’t show up until the first week of November. So for October, think of those dates as either digestion points or possible reversals—it’s your call which one plays out.

Seasonal Context & Events

We’re now in that quiet stretch—about one, maybe two weeks out from earnings season kicking off again. No holidays on the calendar, no options expirations to wrestle with, and no end-of-month inflows or outflows distorting the tape. But it’s worth keeping in mind that we’re creeping toward the end of the quarter, and that in itself can sometimes bring its own quirks as positioning and window-dressing games start to matter. Otherwise, it’s as clean a backdrop as you’ll get—at least until earnings return to shake things up.

Key events include:

• 23rd September 16:35UTC Fed Chair Powell Speech
• 25th September 12:30UTC GDP
• 25th September 12:30UTC Initial Jobless Claims

Those events may or may not influence the opening direction and subsequent days.

The Trading Week Recap

In the last few weeks, I’ve been chewing on a question: where’s the actual line between hope trading and believing in yourself? Let me explain. You open a trade because you believe stock XYZ is headed somewhere—up, down, or maybe sideways. You’ve got your time horizon, anything from minutes to months. But at what point does the trade need to start paying off? More importantly, when does that little voice start whispering, “I hope it turns around”? And where’s the line between “I hope that…” and “I know what I’m doing”?

Take my last four weeks. I’ve made three trades: one beautiful call on RCL, one killer put also on RCL, and one “meh” call on DIA. The RCL call? Straight to a 100.23% gain in five trading days. The RCL put? A bit bumpier, but 259.16% in seven trading days. The DIA call? A grand total of 6.06% after five trading days. Opened it on the 11th, closed it today, the 18th (I’m writing this on the 18th).

Now, if you pull up DIA’s chart, you’ll probably ask: “Why do you always preach ‘close losing trades immediately’ and then hold this one?” Fair question. For the first three days, it was red. On the fourth, it broke even. On the fifth, a tiny gain. Why did I keep it open? Because I had enough conviction to let it run—but conviction can look a lot like hope if you squint. The reverse divergence on RSI, a rising MACD, DM positioned just right on the daily, weekly indicators pointing up, and the monthly setup whispering, “I’m going higher.” That’s what kept me in. Why it didn’t actually move? That’s on me—I didn’t study enough. But here’s the heart of it: was I hope trading? Or was I following the signals, even if the payoff was a lousy 6%?

So when is technical analysis “enough” to justify sitting through some short-term pain in your P/L? Honestly, after days of mulling it over, I still don’t know. It feels like a messy cocktail of knowledge, experience, mindset, and gut. No clean rule, no magic answer.

But two things did crystallize for me in the process:

1. If you can’t explain to yourself why you entered the trade in the first place—close it. Period.
2. If you can look at a trade and accept being wrong—defined for me as eating even a 100% loss on the stack—you’re a lot safer from slipping into pure hope trading.

That’s as close to a line as I’ve found: clarity on entry, and acceptance of loss. Everything else lives in the gray zone.

What happened last week? Forecasts pointed to a push up into the R2–R3 zone.

And guess what? Nailed it. I love it when I’m perfectly in sync with the flow. (R2 6657, R3 6664, close 6664.36 – pat pat).

Support & Resistance Levels

R3	6719
R2	6703
R1	6669
Close	6664
S1	6521
S2	6509
S3	6496

Forecasts

Let’s try to connect the dots—or at least pretend there’s a neat invisible line running through all the chaos.

We’ll start with what I think is the heaviest weight on the scale: end-of-quarter window dressing. Fund managers are shuffling things around so their reports look shiny and respectable—full of winners, none of the losers. But let’s be real: how many “big name” stocks have truly underperformed since the April dip? Not many. So, sellers may be in short supply. On the chart side, I’m seeing converging lines on the higher timeframes—think MACD above Signal but slowly drifting closer. That doesn’t scream crash, just narrowing paths where up and down can’t both stay open for a while. Add in SPXEW posting a lower high while the S&P 500 made a higher one, and you’ve got a classic “Market looks good, but not everything’s joining the party” setup. Translation: if you’re holding one of those “diversified” portfolios (a.k.a. “I don’t know what to buy so I’ll buy everything”), you probably didn’t feel the same gains as the headline index. And seasonality? August and September are supposedly the graveyard months, yet this year they’ve been oddly cheerful. Three straight weeks of climbing—maybe enough to spark some profit-taking jitters.

So what does this grand collage tell us? Pretty much the usual: nothing conclusive.

Thermometer check: DJU’s still pointing up, albeit a little bumpy. Stretched Yale’s Theory is calling for a sharp selloff after the 10th. And my own forecasts? A tilt lower after the 19th, maybe extending to the 29th. So, yeah—pick your poison.

I’d still lean bullish for the week, though I wouldn’t be surprised if we kick things off with some red. That trendline stays on my chart—I like it—and as Brian Shannon reminds us, a trendline starts losing its credibility after four touches. We’re at three so far. Could it play a role this week or next? Wouldn’t rule it out. Support levels have tightened up, which usually means the Market’s coiling for something. My view? Either we push back into the R2–R3 range, or we dip to test that trendline and then bounce back toward R1.

P.S. After April’s decline, I dug back into history to study how the Market behaves after those classic “V” bottoms. I wanted to know how far it usually recovers before smacking into resistance. For the S&P 500, the key levels I found were 6707 and 7194. That’s the yellow line you see sitting between R2 and R3—worth jotting down for future reference (next week I will change the color, I can barely see it).

Seasonal Context & Events

We’re well past the bulk of earnings season now, with only stragglers left to report. No holidays on the calendar, and no end-of-month inflows or outflows to stir things up just yet. What we do have, though, is options expirations—worth flagging since we’re also rolling into the end of the quarter, which can add some extra weight to positioning. And don’t forget, it’s the third Wednesday of the month too, meaning the bond market steps onto the stage with its usual auction spotlight.

Key events include:

• 17th September 18:00UTC Fed Interest Rate Decision + Projections
• 17th September 18:30UTC Fed Press Conference
• 18th September 12:30UTC Initial Jobless Claims

Those events may or may not influence the opening direction and subsequent days.

The Trading Week Recap

You’re in luck—two weeks in a row of technical content (which probably buys me a month off, because this one’s a pretty juicy rabbit hole).

But before diving in, we need context. First, in the last article—and more broadly—I was leaning toward an early-October rise, which investing-wise looked like a sweet spot to scoop up shares of companies you like. Then reality kicked in: looking back at the charts, medium-term frames are stretched to their limits. Translation: they need to come down before any sustainable climb resumes.

Meanwhile, as I was prepping some numbers for the end-of-year article, I started poking around with Yale Hirsch’s old chestnut: “As goes the S&P in January, so goes the year.” Yale wasn’t talking patterns, just direction. White January candle? Expect a bullish year. Red candle? Bearish year. Simple.

But my brain doesn’t leave it there. I asked myself—what if January’s patterns on the S&P 500 actually map out the rhythm of the whole year? Turns out I’m not the only one to wonder (Google tells me others have played with this too), but I reached the idea on my own (pat pat). So, I took the January 2025 price action and stretched it across all 252 expected trading days of the year. And here’s what I got…

Now, to me this is a bit of a “what the actual fuck?” moment. But before we get carried away—here’s the setup: the orange line is January 2025’s behavior stretched across the year, while the green line is the actual closing price so far.

Before you rush off and try it yourself, let me save you some time—no, I haven’t found anything this accurate before. (And yes, we’re still in September, so just because it’s been spot-on so far doesn’t mean it’ll keep batting 1.000 through year-end.) For now, I’d just call it “coincidence.” Which, let’s be honest, is the polite word we use when we can’t explain why something’s working.

But… there’s always a but, of course. What I’ve noticed is that Yale Hirsch’s idea is actually pretty accurate: white candle in January, you’ve got yourself a bullish year; red candle in January, bearish year. Simple, but surprisingly useful if you’re building out a long-term view. Beyond that? Not much. Every now and then a dip or peak in January foreshadows a move later in the year, but it’s rare and honestly more of a coin toss—half the time it even points the wrong way.

What happened last week? Well, there were no forecasts, just a range—and that range was promptly broken. Still, I can’t help but admire how nicely those S/R levels act as pinpoints. Market climbed all week, nothing dramatic to highlight—just up and away.

Support & Resistance Levels

R3	6664
R2	6657
R1	6623
Close	6584
S1	6442
S2	6420
S3	6398

Forecasts

Let’s tie a few threads together from what we’ve been covering here:

DJU vs. S&P 500 → DJU typically leads by ~3 months, and it’s been climbing in June/July.

No divergence → S&P 500, SPXEW, and VALUA are all aligned with higher highs and higher lows.

Yale Hirsch theory → Suggests a drop (or at least a contrarian move) from here.

Personal forecasts → Leaning bearish starting from the 19th.

Weekly indicators → Stretched high and losing steam, supported only by monthly/quarterly charts.

Net result? Two bullish points, two bearish, one neutral—the Yale wildcard. That balance tells me we’ll probably hang around here a bit longer, and if a decline does show up, it’ll be sharp and catch plenty off guard. On the S/R side, the picture isn’t exactly comforting either: heavy resistance stacked just above, while support sits far away but neatly ordered. Translation? A push into the R2–R3 block (maybe a bit choppy) looks probable to me. But hey, remember how wrong I was last week? That CAN—and WILL—happen again.

Seasonal Context & Events

Earnings season is officially behind us, so no more fireworks from that corner. This week also brings no options expirations, no holidays, and no end-of-month flows to stir things up—basically, the calendar looks pretty quiet (or maybe not). The one thing worth flagging is the 2nd Wednesday of the month, which means the 10-year note auction is on deck. If I were you, I’d keep my hands off the keyboard until at least 17:00 UTC that day before making any decisions—if you really have to make one at all.

Key events include:

• 10th September 12:30UTC PPI
• 11th September 12:30UTC Inflation Rate
• 11th September 12:30UTC CPI
• 11th September 12:30UTC Initial Jobless Claims

Those events may or may not influence the opening direction and subsequent days.

The Trading Week Recap

Non-technical this week, so if you came looking for some “get rich quick magic trick,” feel free to skip—because I don’t publish that junk, and I don’t believe in it either.

I’m not here to get rich off this blog. It’s ad-free (except for that one accidental week I had Google Ads running—rookie mistake), and at the end of each article I just drop a small way for readers to say “thank you.” Shoutout to the two people who’ve supported so far—seriously, those few bucks mean more to me than any end-of-month paycheck. Truth is, I’m doing this more for myself than anyone else, which is also why I sometimes drift into the psychological side of being in the Market.

As I mentioned in my last piece, I caught a signal on Friday, August 29th that the Market was ready to turn down. But I also said I didn’t expect it to last more than three days. Why? Because I live completely detached from the news cycle—no headlines, no noise. That way my brain doesn’t push me into reacting to “good” or “bad” news. I literally loop the same two TV shows like a broken record. Sounds autistic, maybe, but it works—it keeps me from being influenced by all the garbage people try to throw into your head.

Personally, I’ve stopped believing in signals that are triggered by news. They rarely last more than two or three days before fading out. Example? April 3rd, 2025. Classic short-lived, news-driven move. Compare that with February 20th, 2025—solid signal, not triggered by headlines, just technicals lining up. And the best kind of mix? February 21st, 2020: a technical weakness already in place, then news came in and poured gasoline on it. Those are the gems—the setups that already made sense technically and then got supercharged by external events.

So, back to the August 29th signal. I saw it, checked it, validated it, and said to myself: “Yeah, it’s a down signal—but not enough to actually make money off it.” What did I do next? I shifted my horizon forward and asked: “When and where will it bounce?” Took note, waited, checked if the bounce was genuine, and then acted.

From what I’ve seen, Markets don’t move because of news. They price in the news, and that move shows up on the chart. But that doesn’t mean it’s going to go far enough, or last long enough, for you to actually profit.

In my head, I see it like an aircraft flying through different pressure zones. Pilots set their altimeters based on pressure, so when atmospheric pressure changes, the aircraft’s altitude relative to the ground shifts—but the plane itself is still climbing, cruising, or descending. Markets work the same way: news may jolt them up or down momentarily, but the bigger trajectory—uptrend, range, or downtrend—remains intact.

What happened last week? Forecasts were calling for a drop onto the trendline and then a bounce to keep the rise alive.

Instead, the Market decided to dip a little lower—straight into S1 on Tuesday. So yes, my Casio was right, I was wrong. From there, we bounced as expected, pushed up to R1, and got promptly rejected.

Funny detail: Monday’s low landed at 6360 (bang on), the week’s high hit 6532 (just $4 off), and after all that, we closed pretty much exactly where we started—6481, same as the previous Friday. A whole week of movement just to go nowhere.

Support & Resistance Levels

R3	6579
R2	6554
R1	6536
Close	6481
S1	6346
S2	6337
S3	6249

Forecasts

Should’ve just trusted my trusty Casio—spit out S1 at 6360, and sure enough Tuesday’s low? 6360.58. Pat pat. Had that calculator for over 20 years, never changed the batteries—starting to think it deserves more credit than I do. Anyway, what’s next? This week I’ve got to bring in what I call awareness. Normally I don’t like anchoring forecasts on events, but sometimes you can’t ignore them. Case in point: the Inflation Rate release on the 11th. If it comes in “better than feared,” Markets go up. If it’s just as expected, we might get a whole lot of nothing. And if it disappoints? Well… cue the chaos.

But here’s the nuance: if the news is very good and the Market doesn’t budge, that screams hidden weakness. If the news is ugly but the Market holds, that’s hidden strength. Both tell you more than the headlines do.

So what do I expect? Honestly, no clear direction this time—which is why I’m framing it range-wise instead. By Friday, the weekly candle should be small-bodied —10–20 points, nothing dramatic. Why? Because Monday may start with a rise (that trendline’s been acting like a tripwire for buyers every time it’s touched), but here’s the catch: it’s been punctured a few times already, with lows slipping underneath. And just like poking a balloon with tiny pins, every puncture makes it weaker. So yeah, the line still attracts buyers, but it’s not the fortress it once was. After that, traders will likely freeze ahead of the inflation number. At 14:30 UTC on the 11th, we’ll finally see. Me? I won’t touch it until I’ve got a closed candle in front of me.

Range-wise, I see price boxed between S1 and R1. If something nasty shows up, a dip to S2 feels more likely than any clean push to R2. Yeah, the range is 190 points wide—which feels comically oversized for a “forecast”—but hey, it is what it is.

Seasonal Context & Events

Earnings season is over and the next one won’t arrive for another month. There are no options expirations scheduled, but markets will remain closed on Monday, September 1st for Labor Day. In the meantime, end-of-month and beginning-of-month inflows and outflows may still influence price action as capital is reallocated and portfolios are adjusted.

Key events include:

• 03rd September 14:00UTC JOLTs Job Openings
• 04th September 12:30UTC Initial Jobless Claims
• 05th September 12:30UTC Unemployment Rate

Those events may or may not influence the opening direction and subsequent days.

The Trading Week Recap

Let’s go a bit technical this time. Remember when we talked about the S&P 500, SPXEW, and VALUA? Well, this is in the same ballpark—just swapping players.

Enter the DJU (Dow Jones Utility Average). I’ll leave the full “what it is and what’s inside” to your Google search bar, but here’s the gist: plenty of market watchers have noticed that DJU tends to flag market tops and bottoms earlier than the broader indices—roughly three months ahead, give or take. That “three months” is based on my own observation, and I’ve seen some variance in the timing—it’s not a stopwatch. Why utilities lead the way? Honestly, not my concern. I’m more interested in what happens if you combine it with SPXEW/VALUA divergences against the S&P 500. Together, that mix starts to look like a handy toolkit for long-term investing calls. Would I use it for trading anything under three months? Nope—too noisy for that.

To make it a bit clearer, I put together a simple chart with data back to 1992: S&P 500 in orange, DJU in blue, but shifted forward by three months (again, give or take). The rest? That’s on you—draw your own conclusions, see if the pattern holds water.

I know, the quality of the chart isn’t going to win any awards—it’s well below “acceptable.” But hey, you can do the legwork yourself too, the data’s out there.

And just to be clear, I didn’t invent this. People way smarter than me had already noticed this years (decades) ago. If you want to dig deeper, look up:

• Richard Russell, Dow Theory Letters
• Norman G. Fosback, Stock Market Logic
• Martin J. Pring, Technical Analysis Explained

I’m just connecting dots they already sketched out.

What happened last week? Forecasts were calling for another bullish week, but with a caution flag—after that Friday the 22nd, the “enthusiasm bleed-off” could make any push up to R1 (and maybe R2) a tougher climb than it looks.

What did we actually get? Monday didn’t exactly set the week on fire, but the move to R1 still played out—missed it by just $2.85. Since I don’t count decimals, let’s call it a $3 miss, which I’ll happily file under “acceptable.” By Friday, though, price couldn’t push through R1, got rejected, and rolled back down.

Support & Resistance Levels

R3	6593
R2	6575
R1	6536
Close	6460
S1	6360
S2	6321
S3	6298

Forecasts

What’s next? Honestly, this one’s a bit of a head-scratcher. My trusty Casio couldn’t spot any real support until 6360—about 100 points below this week’s close—so I threw in a bonus trendline just to give myself something to work with (you’re welcome). If someone had a gun to my head and demanded a 5-day forecast (well, 4 this time), I’d say Friday’s drop looked more like a news-driven hiccup than genuine technical weakness. Moves like that usually linger for 2–3 days before losing steam. So maybe we drift lower early in the week, tagging that handy little trendline before it gets ugly, and then see a bounce by Wednesday or Thursday (reminder: Monday’s closed).

Will we punch up to R1 by Friday’s close? Not sure—draw a trendline across the recent highs and you’ll see why I’m hesitant.

Bigger picture, I still expect September to lean lower overall—but not just yet. More on that in the End of Month section below.

End of Month

Let’s recap what went down in August, but first, let’s bring back the forecasts.

As for the rest of August? I don’t really have any solid DOIs marked—just one, actually. The 22nd. That’s the only spot on my map where a potential buy-and-hold setup might show up. Outside of that, it’s a month to stay nimble or stay out.

Now, how did reality play out? Well, not exactly as expected. Instead of the dull sideways grind with a bearish tilt, we got some surprisingly clear DOI action—right on the 1st of the month and again mid-month, both highlighted by the two red vertical lines on the chart (yep, missed those in advance). The only DOI I had flagged was the 22nd (blue line), and we all know what happened there.

But… yep, there’s a “but.” It’s not like I missed a couple of DOIs and took it personally—ego stayed out of it. What I do want to show you though is a quick comparison between the S&P 500 and the SPXEW.

What do you see? Personally, I see that the rise from the 1st through mid-month was carried almost entirely by a handful of stocks—probably the usual big names—because the SPXEW didn’t follow. Same story with that 5-day decline into the 22nd: S&P 500 showed it, SPXEW didn’t confirm it.

What does that mean? Trading-wise, unless you were in those few leaders, you weren’t making money. And value-wise? If you thought the whole Market was roaring, nope—it was just a handful of names dragging the headline higher while the rest lagged behind. The S&P 500 gave you a higher high, but SPXEW quietly printed a lower one.

What about September?

DOIs on the map: 8th, 15th, 19th, 29th.

Here’s the rough sketch: a possible rise into the 8th, stall out there, then a pullback that could drag into the 15th. After that, maybe another push up toward the 19th, and then a slide again into month’s end.

We’ll check back in a month to see how reality treated this roadmap.

Just a little preview: by the time we circle back to check these forecasts, it’ll already be October 3rd, so here’s the gist. I’m expecting a solid rise through October that could stretch into mid-November. After that, aside from a little post-Christmas rally, the last month and a half of the year doesn’t look packed with trading opportunities. Rolling into the new year, I see a dip—some turbulence to the downside—lasting until mid-January 2026, followed by a climb that could run into the first few days of April 2026.

Why give this away now? Simple. If I were you, I’d be watching my favorite stocks closely as September closes and October begins—it could be the right time to line things up.

Seasonal Context & Events

We’re in the last stretch of earnings season—so let’s be honest, we can call it over. No options expiration on the calendar, no holidays to slow things down. But keep an eye out toward the back half of the week, when end-of-month inflows and outflows may start to creep into the Market and add a little extra push or drag.

Key events include:

• 28th August 12:30UTC GDP
• 28th August 12:30UTC Initial Jobless Claims

Those events may or may not influence the opening direction and subsequent days.

The Trading Week Recap

This week was supposed to be about a technical topic, but I literally didn’t have the time to both flesh out the concept and test if it was even worth sharing. It looks “tasty” on paper, but before I write about it—and definitely before pretending to be the first one to do so—I’d rather see it in action myself. Come back next week, apologies in advance.

What happened last week? Forecasts were calling for a red week with the 22nd circled on the calendar—pretty much nailed it. Pat on the head, move along.

Support & Resistance Levels

R3	6554
R2	6522
R1	6499
Close	6466
S1	6316
S2	6297
S3	6256

Forecasts

No, I definitely wasn’t expecting that kind of surge on Friday—anyone who says “oh yeah, it was obvious” is flat-out lying. Sure, the 22nd was marked as the only DOI for August, but that pop had way more juice in it than I’d priced in.

Looking ahead, I did expect some upside from the 22nd onward, but since that move already baked in a dose of enthusiasm, there may not be much fuel left in the tank. I’m still leaning bullish into next week, but let’s keep it realistic: resistance kicks in hard around 6522–6554. Could we gap up and rip through it? Possible. But I’m not in the business of guessing gaps. My forecast? A push to R1, maybe even R2, before momentum stalls out as the excitement cools. The “anticipation trade” has already been bought—realization probably won’t come until around September 17th. Will we climb all the way there? Not entirely convinced.

Seasonal Context & Events

We’re technically still in earnings season—though at this point, it’s more of a slow drip than a flood. No holidays to break up the week, no end-of-month inflows or outflows to mess with the tape. The only calendar blip worth noting? Third Wednesday of the month, which means it’s time for the 20-year bond auction—one of those background events that doesn’t always move the Market, but can quietly shift the mood if the numbers surprise.

Key events include:

• 20th August 18:00UTC FOMC Minutes
• 21st August 12:30UTC Initial Jobless Claims

Those events may or may not influence the opening direction and subsequent days.

The Trading Week Recap

Completely non-technical thought this week—so if you came here hoping for some shiny new tool for your arsenal, you might want to check back next week. But as my instructor likes to remind me (and I mean relentlessly), “Trading is 5% technical, 95% mindset.”

I’m subscribed to this free newsletter—not stock market related at all—but every Saturday, it drops a handful of quick thoughts from the author and people all over the world. I’d love to share the name, but since I’m not a lawyer, I’ll play it safe and skip linking. What I can tell you is the author: Shane Parrish, the mind behind Clear Thinking. Solid read with plenty of gold nuggets. Personally, I think some sections could have been one-fourth the length—concepts don’t always need a TED Talk to make a point—but still worth picking up.

Last week, in the “Tiny Thoughts” section, Parrish wrote:

People think good decision-making is about being right all the time. It’s not. It’s about lowering the cost of being wrong and changing your mind.

When the cost of mistakes is high, we’re paralyzed with fear. When the cost of mistakes is low, we can move fast and adapt.

Make mistakes cheap, not rare.

He wasn’t talking about trading—but man, if that doesn’t hit home here. I’ve said it before: cut your losses. My first profitable year wasn’t because I suddenly became the Nostradamus of trading —it was because I ruthlessly slashed my average loss size. Less time in losing trades, less stress, less “hope trading,” fewer capital drains. The winners were already there; I just stopped letting the losers chew up the gains.

With stocks, you can always stubbornly hold and pray for a rebound—tying up your capital for years. With options? No such luxury. Time decay will eat you alive while you wait. If you’re wrong, you don’t wait—you click “sell” and move on. The faster you do it, the cheaper the lesson.

Bottom line: make your mistakes cheap. And then make fewer of them by cutting your losses early.

What happened last week? Forecasts were calling for a push up toward R1 and R2, followed by a potential high-volatility stall once we got there.

Yep, nailed it—rise to R1 and R2, then range-bound in that zone. The only miss? No “volatile Friday” like I’d called for. Still, giving myself a pat on the head and moving right along.

Support & Resistance Levels

R3	6569
R2	6547
R1	6496
Close	6449
S1	6322
S2	6297
S3	6198

Forecasts

Call me whatever you like, but I’m seeing red for next week. My only DOI for August is still parked on the 22nd—Friday—and I’m sticking with the view that if we do slide, that date marks the bottom of the month’s drop. And while September, along with August, ranks among the Market’s two worst-performing months, I don’t see prices dipping below where we’ll land at the end of August.