Meta Strategy Trading Portfolio – Probability Map Update.
– Tuesday Positioning Update –
Building the Big Picture Outlook for 2026 (part I)
A range of different analytical perspectives for next year’s outlook are based on (I) Market Cycles, (II) Historical Patterns, and (III) Price Momentum influenced by fundamentals and the coming turn-of-the-year (TOY) price dynamic, all of which I plan to address over the coming weeks.
I) Cycle Based Outlook
Secular and cyclical bull markets are in positive alignment.
A true bubble melt-up could run quite a bit longer by historical standards and even the current cyclical bull market is still well below the average duration.
However, the coming midterm election year tends to be notoriously volatile and difficult: The average drawdown during the year is -17,5%.
This jibes with the cyclical pattern in which Q3 of bull-market year four has a distinct tendency for weakness within a strong bull market.
While 2026 has a good chance to end positive – maybe even by double digits – a deep intra-year drawdown around 20% should definitely be on our bingo card: In previous cycles the time of maximum weakness was in the third quarter with a peak after Q1.
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