#midtermyear

May 1 kicks off the Worst Six Months. The question this year: did the Iran-driven selloff already do the seasonal work?

The Trump Presidency Seasonal Cycle we’ve been tracking remains in play. Five Trump presidency years — 2017, 2018, 2019, 2020 and 2025 — share a signature. Turbulence early, a bottom in late March or early April, then a rally into year-end. We added those five years to our S&P 500 Midterm Election Year Seasonal Pattern chart. 2026 is tracking it closely.

S&P 500 bottomed March 30 at 6343.72, down 9.1% from the January 27 high and hit a new record today, up 12.9% in 25 days. NASDAQ is at a record up 19.4% from the low. DJIA is 1.9% off its February 10 all-time high. The December Low Indicator triggered in March and was recovered quickly — historically a green light when paired with a positive January Barometer.

Our Best Six Months Seasonal MACD Sell signal hasn't triggered, yet. The market will likely mark time through the 4-Year Cycle Weak Spot as the Iran conflict works toward resolution. Then the Q4 Sweet Spot. Our 2026 base case — 8-12% full-year gains — remains intact. If the conflict doesn't resolve and the Sell signal fires, we rotate.

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Lots of chatter this week on Sell in May. Worst Six Months May-October are historically worst in the midterm year — but Sell in May has been up 9 of the last 10 years and 2025 was the best. Much of the May-October and midterm year Q2-Q3 weakness was pulled forward to the Q1 Iran war correction.

The market has largely moved on and clearly expects a resolution over the next few months, if not sooner. With the conflict still unresolved, expect the market to mark time and move sideways through the 4-Year Cycle Weak Spot and Sell in May as the Mideast works toward a resolution with likely setbacks and midterm election year politicking ramps up.