What to Expect in 2026
Premium Section: Using the Cycles SMA System to Make Generational Wealth
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
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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.
Seasonality: Midterm Election Years Bring Volatility
We can expect volatility in 2026. Looking at the 4-Year Presidential Cycle, Midterm Election Years tend to bring the highest degree of downside volatility with a statistical peak around April 20th and trough around September 29th.
How bad can the volatility get? There is a reason for concern and excitement. Midterm Election Year corrections are statistically the highest in the 4-Year Presidential Cycle with an average drop of 17.5%. However, when the trough is in, the market tends to go up 31.7% on average. Danger brings opportunity.
A Fundamental Red Flag
The headlines of the articles below (especially the Bloomberg one) makes me worried for the stock market. I know from experience, when everyone thinks the same thing…it often becomes a “crowded trade”…and the opposite happens. Logistically, a one-sided consensus trade triggers the Market Maker Self-Defense Mechanism…when everyone takes one side of the trade (long equities in this case), then the Market-Makers must take the other side of the trade (sell their inventory first and when that is depleted…sell short). If the Market Maker has a huge short position and they control prices…it would be in their best interest to push prices lower so they could close their short positions at a profit.
Here are the 2026 price targets for the S&P 500 from the top Wall Street firms:
The average price target is $7,500 for the S&P 500:
Valuation is high as the Forward Price to Earnings ratio of the SPY is around 22x, which is on the high side. For prices to keep going up, earnings will have to surprise to the upside. Any downward guidance or disturbance could send prices significantly lower.
SPX Targets Using Pivot Points
Yearly pivot points on the monthly chart often act like a magnet for major turning points. In 2025, the April correction touched the S1 Pivot Point and then reversed, ending the year grinding against the R2 Pivot Point. If a correction in 2026 were to reach the S1 Pivot Point, that would imply a roughly 20% decline to the $5,474 level, which would be entirely normal. A move down to the S2 Pivot Point at $4,098 would represent a 40% correction. On the upside, a rally from the S1 Pivot Point to the R1 Pivot Point would equate to a 38% advance, while a move to the R2 Pivot Point would imply a 52% rally.
In the Premium Section we’ll go over key turning dates and how to use the Cycles SMA System to make generational wealth in the upcoming storm.
Also consider using our Cycle Forecasts as a guide to this potentially volatile year here.
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.