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Is the S&P 500 Heading for a 10% Correction? Key Signals to Watch in 2025

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Last night, while I was crunching some numbers on my spreadsheet, I found myself revisiting the eternal question:   What are the markets really pricing in?   The conclusion I kept circling back to is hardly groundbreaking but crucial —   the Federal Reserve remains the dominant driver behind the market’s trajectory . But how does this tie into the current technical setup of the S&P 500? Looking at the chart, it seems clear that a correction is already underway, with the index down about 4% from its December peak. Based on my analysis, the technical picture aligns with broader market sentiment — suggesting we may not have seen the worst yet. A Technical Breakdown: What the Chart Tells Us The chart paints a compelling picture of a market struggling within a rising channel. Recent breakdowns below key support levels suggest that the S&P 500 could drop another 10% to 15% in the coming weeks. This aligns with the views of major analysts, including: .....I've stopped us...
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When Everyone Expects a Correction, It Rarely Happens: A Balanced View

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Market commentators have been buzzing about the possibility of a correction in the S&P 500, powered by concerns over valuations, inflation, and Federal Reserve policy. But history is often at odds with consensus, and market behavior regularly upsets the best-laid plans. Yes, the SPX’s forward P/E ratio of 22x (forward earnings) is not in bubble territory compared to the 30x seen in the 2000 tech bubble, but risks remain. Let’s dive into the data, trends, and perspectives that shape the current market narrative. Valuation: A Closer Look Wells Fargo Investment Institute  provides a nuanced view on SPX valuations. They note that while the index’s forward P/E of 22x is elevated, it’s not comparable to historical bubbles. Instead, a significant portion of the index’s performance has been driven by “The Magnificent 7” (seven high-growth tech companies), which trade at lofty multiples. Excluding these giants, broader SPX valuations align closely with the historical 10-year average. Th...
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S&P 500 Election-to-Inauguration Performance: A Historical Perspective

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As a trader and analyst, I always start by diving deep into the data, analyzing the interplay of economic, fundamental, and technical factors. Today, I’ll explore a fascinating historical pattern: the performance of the S&P 500 (SPX) between U.S. presidential Election Day and Inauguration Day. Historical data reveals an intriguing trend often discussed in trading circles — the “Buy the Election, Sell the Inauguration” strategy. Let’s break it down based on the performance of the SPX from 1980 to 2020, a period encompassing significant political and economic shifts. Election Day to Inauguration Day: The Numbers Here’s how the SPX behaved during each election cycle: Key Observations 1.  Election-to-Inauguration Gains: The S&P 500 typically sees positive returns during this period, with only two exceptions: 2000 and 2008. The 2000 election reflected the dot-com bubble’s uncertainty, while 2008 was marked by the global financial crisis. The standout year is 2020, with a massive...
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