#stocktradersalmanac

[jeffhirsch]

Trump Presidency Seasonal Cycle Pattern: Q1 Shock. Q2-Q4 Awe.

Is this another Trump TACO Trade Spring Bottom?

Dow Futures up 1,200+ points on Iran deal news this morning. VIX over 30 at the open. And one of the classic TACO trades in recent memory — the 5th biggest 5-minute bar of all time.

Five Trump presidency years — 2017, 2018, 2019, 2020, 2025 — same pattern every time: Q1 turbulence, Q2 bottom, then a sustained rally into year-end.

Art of the Deal, seasonal edition.

[jeffhirsch]

Trump Presidency Seasonal Cycle Spring Bottom

The market has spent the past several weeks working through geopolitical uncertainty, energy volatility, and shifting macro signals. Yet despite the noise, the pullback has remained relatively contained—an important sign of underlying strength.

One pattern stands out: during Trump Presidency Years, the S&P 500 has tended to carve out a spring bottom in late March to early April before staging meaningful advances into year-end. S&P 500's low close was March 30. The two-week U.S.-Iran ceasefire has held — and despite weekend peace talks ending without a deal, a new round of in-person negotiations is in the works this week. So far, 2026 is tracking the Trump Presidency seasonal pattern closely.

Markets don't wait for clarity — they bottom in uncertainty. The S&P 500 has erased all of its Iran war losses. With sentiment reset, positioning lighter, and volatility elevated, the backdrop is in place for a near-term recovery. The Middle East turbulence may have pulled forward much of the typical midterm Q2-Q3 weakness. That creates opportunity.

Geopolitical risks and energy markets remain key variables, but the market has absorbed these shocks better than many expected. Growth is holding, labor is solid, and the Fed is neutral. If diplomacy continues to progress, the setup for equities into year-end looks increasingly constructive.

[jeffhirsch]

Did the Trump Cycle Steal Sell in May Weakness?

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.

Don't miss the Signal. Be first to know. Subscribers get the Seasonal MACD Sell Signal the moment it triggers right in their inboxes. Join Almanac Investor → https://stocktradersalmanac.com/LandingPages/get-Almanac-for-free.aspx

[jeffhirsch]

Don't Sell in May — Ride Russell 2000 Best Eight Months + TACO Trade

With stocks popping on AI boom, Iran deal, and oil retreat news today, the Russell 2000 is up 16% since October intraday, leading the major indexes. NASDAQ is up ~8%, S&P ~7%, and DJIA ~5%. This is the heart of NASDAQ's and R2K's Best Eight Months — November through June.

The TACO Trade Trump Presidency Seasonal Cycle chart we've been tracking shows the spring bottom and subsequent rally right on track. We're not selling in May. We're holding NASDAQ and small caps through the Best Eight Months and letting the TACO Trade run.

When and if seasonal and midterm year weakness materializes, our MACD timing indicator will provide the signal to reposition — not Sell in May and go away. For now, technicals, earnings, macro trends, and the news cycle all point the same direction, and you don't fight the tape.

[jeffhirsch]

May Day! Russell 2000 Higher 71.4% of the Time — Best Track Record

The first trading day of May has had a bullish history over the past 28 years. DJIA and S&P 500 averaged around 0.35% on the day, NASDAQ 0.42%. Russell 2000 has the best frequency record, up 20 of 28 years or 71.4% of the time since 1998, though its average gain of 0.23% trails the large caps.

NASDAQ bullishness has been fading recently — down 5 of the last 7 years. May 1's worst loss came in 2020: DJIA and S&P 500 shed over 2.5% while NASDAQ and Russell 2000 dropped over 3%. In 2022, NASDAQ and Russell 2000 both gained over 1%.

Today's big gains on the last trading day of April bode well for May 1. When the S&P has been up more than 1% on April's final session, May 1 is 3 for 3 with an average gain of 0.73%.

[jeffhirsch]

2026 Market Forecast & Outlook: 6th Year of Presidency & AI Super Boom Fuel the Bull - Free replay!

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Save $50 off our regular annual rates and lock in an additional 1- or 2-year subscription at our lowest available price. Over 55% Off compared to standard quarterly price! Don’t delay, the holiday season is wrapping up soon and this offer will end this week. 

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[jeffhirsch]

Yale Hirsch’s Santa Claus Rally & January Barometer, Trifecta 2 out of 3 Ain’t Bad

My father Yale Hirsch invented both of these well-known seasonal indicators in 1972 and published them in the 1973 Stock Trader’s Almanacas you can see in the picture above on pages 11 and 111. He passed away late last year at the ripe old age of 98. Not only was he the illustrious founder of the Stock Trader’s Almanac, but he left me and everybody on the planet a rich legacy of seasonal patterns, strategies and indicators. Many of which he discovered, invented or devised. He also brought others to light with clarity and always full credit of course. And most importantly, from the first Almanacin 1968 Yale taught us all how to think differently about the markets and recurring market patterns. Thanks to him we have a plethora of tools in our analytical and statistical arsenal.

To quote the great Sir Isaac Newton, “If I have seen further, it is by standing upon the shoulders of giants.” We proudly stood on Yale’s giant shoulders when we created our “January Indicator Trifecta” back in January 2013. Which brings us to the present.

Combining our three January indicators, the Santa Claus Rally (SCR), First Five Days (FFD) and January Barometer (JB), into the “January Trifecta” has proven to be an especially reliable gauge for future market performance. When all three are positive, as was the case in 2019, the next eleven months have been up 87.1% of the time with an average gain of 12.3% and the full year advanced 90.3% of the time with an average S&P 500 gain of 17.5%. The worst full-year decline in a year with a positive January Trifecta was 13.1% by S&P 500 in 1966.

With less than two hours left in the First Five Days, S&P 500 will need to gain more than 70.13 points (1.49%) by the close to keep the bullish January Indicator Trifecta alive in 2022. Since the odds of that happening are slim at this juncture that leaves three possible scenarios for our “January Indicator Trifecta:” SCR up and both FFD and JB down (8 occurrences since 1950 with last 11 months up 2/down 6, average -5.8%, full year up 1/down 7 average -9.4%); SCR up, FFD up and JB down (12 occurrences since 1950 with last 11 months up 10/down 2, average 9.9%, full year up 9/down 3 average 6.0%); or SCR up, FFD down and JB up (6 occurrences since 1950 with last 11 months up 5/down 1, average 9.7%, full year up 5/down 1 average 11.8%). So, two out of three ain’t bad. (See the tables below.)

Wednesday’s market decline was triggered by a much more hawkish Fed perception following the release of last month’s FOMC Meeting minutes. A more aggressive removal of Fed liquidity could aid in pulling back inflation and it could pressure stocks as bond yields rise. We will withhold final judgement until the final results of the January Barometer arrive. Our base case scenario from our 2022 Annual Forecast is still our pick at this juncture.

As the opening of the New Year, January is host to many important events, indicators and recurring market patterns. U.S. Presidents are inaugurated and usually present State of the Union Addresses. New Congresses convene. Financial analysts release annual forecasts. Residents of earth return to work and school en masse after holiday celebrations. On January’s second trading day, the results of the official Santa Claus Rally are known and on the fifth trading day the First Five Days “Early Warning” system sounds off, but it is the whole-month gain or loss of the S&P 500 that triggers our January Barometer.

As defined in the Stock Trader’s Almanac, the Santa Claus Rally (SCR) is the propensity for the S&P 500 to rally the last five trading days of December and the first two of January an average of 1.3% since 1950. The lack of a rally can be a preliminary indicator of tough times to come. This was certainly the case in 2008 and 2000. A 4.0% decline in 2000 foreshadowed the bursting of the tech bubble and a 2.5% loss in 2008 preceded the second worst bear market in history.

The January Barometer (JB) has registered 12 major errors since 1950 for an 83.3% accuracy ratio. Including the eight flat years yields a .722 batting average. Over the years there has been much debate regarding the efficacy of our January Barometer. This debate is debunked in today’s alert to our newsletter subscriber’s.

[jeffhirsch]

Sell in May During Midterm Crisis

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.

Trend matters far more than magnitude or level when reading these seasonal charts and historical analogs. We’ve updated the S&P 500’s performance before and after the start of crises. The quick recovery to pre-crisis levels and new all-time highs has been positive historically. But as the chart shows, after the initial shock and selloff, once the bounce back recovery is in, the market tends to mark time over the next few months as the crisis resolution plays out. This lines up with the seasonal weakness of the Worst Six Months and the 4-Year Cycle Weak Spot.