January 2026 Cycle Forecasts
Merry Christmas to all our Cycles Edge members!
As a Christmas special, we would like to officially introduce our Annual 2026 Cycle Forecasts that can be found here.
This is a key piece of our strategy to stay on the right side of the market!
Here’s a quick rundown of what to expect:
1 PDF deck covering 20 different key assets
Each Forecast includes 3 key Cycles - Cycles Composite (our “Secret Sauce”), Energy Cycle (estimates the Power behind a move) and Seasonal Cycle
Access to our team to ask any additional questions anytime of the day or night, including weekends!
Founding Members get the added benefit of requesting us for the Cycle Forecasts for ANY asset.
Please note that we’ve updated the composition of our Cycles Composite (our “Secret Sauce”) in order to increase its accuracy. These modifications are made based on the current market conditions and the backtesting results.
2025 Cycle Forecast Review
Let’s start with a review of our 2025 Cycle Forecast. I’ll conduct this analysis using the 30-SMA (green moving average), which is how I trade in practice. I always ask myself three questions:
1) Is price above or below the 30-SMA (one could also use the 20-SMA or 21-EMA),
2) What direction is the cycle forecast pointing?
3) When are the key turning points?
In the analysis below: 1) the Cycles Composite is shown as the blue line and labeled “CC,” 2) the Energy Cycle is shown as the pink line and labeled “EC,” and 3) the Seasonal Cycle is shown as the green line and labeled “SC.” Now this Annual Cycle Forecast was provided to Founding Members before the start of 2025:
On the chart below of the S&P 500 (SPY) we can see how our Cycle Forecasts, coupled with a moving average, can guide one’s trading and investing decisions:
Here are the 5 most important takeaways:
Cycles warned of a top on 2/10/25, and this was confirmed on 2/21/25 when price broke below the 30 SMA.
The April decline was correctly framed as a cycle-driven selloff. The CC structure showed a 5-wave downtrend, which ended up being a truncated Elliott Impulse Wave.
The CC and EC called for a 4/19/25 bottom.
On 6/11/25 the CC called for a top, however the pullback was still above the 30 SMA. This was a chance to buy a pullback to the 30 SMA.
The CC, EC, and SC all bottomed on 11/21, producing a high-confidence turning point that led to renewed upside.
In 2025, our Cycle Forecasts have proven to be an excellent tool, especially when combined with a moving average. The cycles consistently identified when turning points and opportunity windows were opening, while the 30-SMA determined whether those signals were actionable.
Market Review
We just had a successful Santa Claus rally, and the SPY is sitting at the high of the year. The upside oscillation is largely complete, and while the market could grind a bit higher on fumes, conditions are lining up for a potential early-January pullback. That move could be driven by investors looking to take profits into the next tax year.
The SPY is trending above the 3 SMA (black) right now, telling us that it enjoyed a strong trend. However extensions on the 3 SMA often last only 4 to 6 trading days before a pullback in time (sideways chop) or a pullback in price.
Stochastics are in overbought territory, so a pullback at any time would be completely normal. With MACD still green and RSI holding above 50, any near-term weakness is likely to be met by buyers. The McClellan Summation Index (MSI) and Net New Highs remain supportive, showing signs of a broadening market.
However, the VIX curve is overbought, reinforcing the case for profit-taking. If the market does push higher, the R1 pivot point near $696 could act as a key area of resistance.
The Smart Money/Dumb Money indicator shows that Smart Money is waiting to buy on a pullback, while Dumb Money is all-in. Should we get an early-January pullback, it could be a buyable one.
Meanwhile the Fear & Greed Model is climbing the wall of worry and is not yet in extreme greed territory yet. We should see move upside, even after a possible profit-taking pullback.
In conclusion, traders should raise stop-orders to protect profits and investors should have cash ready to buy the dip.
Now in the Premium Section we’ll go over the January 2026 Cycle Forecasts for our main asset classes and this could be used as a roadmap for the upcoming pullback.
For those who want a timing edge for the entire year, check out our 2026 Annual Cycle Forecasts here: https://cyclesedge.com
Disclaimer - All materials, information, and ideas from Cycles Edge are for educational purposes only and should not be considered Financial Advice. This blog may document actions done by the owners/writers of this blog, thus it should be assumed that positions are likely taken. If this is an issue, please discontinue reading. Cycles Edge takes no responsibility for possible losses, as markets can be volatile and unpredictable, leading to constantly changing opinions or forecasts.