“#Investing well is getting comfortable with being uncomfortable. You know you’ve accomplished this when you see down as good, up as simply better.”
~Jonathan Clements (depicted)
A friend tells you to buy ✅
A foe tells you “when” to buy ❌
– SETH GOLDEN, CHIEF MARKET STRATEGIST AT FINOMGROUP.COM
(CONTRIBUTOR/PREMIUM MEMBERS ONLY)
MID-WEEK SUMMARY
WEDNESDAY, OCTOBER 8TH, 2025
WELCOME TO MARKET MANIA!
Where markets must thread the needle between persistent momentum, gathering headwinds, and a bubble-icious (or not 😉) backdrop peppered with uncertainty. And where traders/investors must come to recognize that when Mr. Market outperforms, over and over again, there is usually a message being communicated to all market participants, and NO, it’s not negative!!!
Despite the extended government shutdown and the absence of fresh labor and inflation data, equities have shown remarkable resilience—pushing to all-time highs and defying typical shutdown-induced volatility. However, with breadth and momentum indicators like $NYSI and the small-cap A/D line deteriorating as prices climb, investors should remain vigilant, not complacent.
Seasonal tailwinds are strong, with a 5-month S&P 500 win streak setting the stage for what has, since 1950, been a reliably bullish October-to-December run. Historical quants from Bluekurtic, Wayne Whaley, and Ned Davis Research point emphatically to higher Q4 2025 returns when September closes with gains above the 100-DMA—signaling investors should use dips as buying opportunities, not abject warnings. Even higher forward positivity rates and a perfect historical record for Q4 gains after robust May–October performance support the case for sticking with disciplined cash management disciplines and alongside buy-and-hold core holding allocations.
Yet, the technical picture is shifting. Anomalous streaks without normal three or five percent pullbacks, coupled with the VIX’s strange positive correlation to rising S&P 500 prices, echo 2017’s pre-Volmageddon environment: price dislocation can—and will—eventually be resolved to the downside, but from where and when is unknowable. Growth has staged a comeback, but defensive and energy sector leadership just a day ago serve as reminders that volatility can emerge quickly, and crowded trades don’t unwind gently.
GS warning⚠️
Realized Vol stock correlation, lowest level since 2017. Emphasizes lack of dispersion. Investors continue to buy w/out discernment.
Last time this occurred into 2018 $SPX would correct -13% and $VIX would significantly spike, resulting VOLMAGEDDON$ES_F $SPY $QQQ… pic.twitter.com/KUQk5xFr6o
— Seth Golden (@SethCL) October 6, 2025
On the macro front, a quietly softening labor market stands in stark contrast to historically low layoffs. Hiring and quit rates have sunk to cycle lows, and consumer confidence reflects growing job insecurity. Without new government data, investor attention has shifted to private sector figures, which reinforce a softening jobs backdrop and support expectations for further Fed easing at the upcoming October and December meetings. The bond market sees cuts ahead, but should they not materialize, it would imply a surprisingly positive outcome for the economy and risk assets.
Earnings provide the final ballast for the markets: for the first time since Q4 2021, S&P 500 earnings estimates were revised higher throughout the quarter. A majority of sectors are on track for year-over-year earnings growth, with information tech and utilities leading the charge, underscoring the persistence of the bullish undertone even in a muddied macro and policy landscape.
Analysts increased Q3 EPS estimates for $SPX companies by 0.1% during Q3, which marked the first increase in EPS estimates during a quarter since Q4 2021 (+0.3%). #earnings, #earningsinsight, https://t.co/ksQEiC4Aw2 pic.twitter.com/kKtKwrOv2L
— FactSet (@FactSet) October 3, 2025
Bottom Line: Q4 offers plenty of opportunity, but demands flexibility and disciplined execution. Take advantage of seasonality and positive quants, but don’t ignore the subtle warning signs in technicals and breadth. Volatility may be borrowed time, and, as always, market leadership will shift without warning. Keep focused on core allocations, manage risk efficiently, and remember—most long-term gains come from simply staying invested through uncertainty, not timing the top.
Let the fourth quarter’s curtain rise, as we once again quickly approach our previously cemented 6,800 price target objective—this is a market rewarding patience, discipline, and the willingness to benefit from the fearful. Stick to the evidence, keep your game plan nimble, and embrace volatility as a companion, not a foe.
Within this weekend's Research Report we outline our new $SPX price objective, time lines and rationale, with supportive evidence.
My price targets, since 2017, have only failed achievement 1 time. Read the report, subscribe to unlock (Contributor/Premium required).$SPY… pic.twitter.com/coRDgOCzm2
— Seth Golden (@SethCL) September 1, 2025
Ready to dive into the full Q4 research, trade signals, and macro context? The key evidence and actionable ideas follow 👇.
CHART(S) OF THE WEEK
🏆 TODAY’S CHART OF THE WEEK WAS SHARED BY JEFF HIRSCH AND SETH GOLDEN (@ALMANACTRADER & @SETHCL):
"October has been the BIG BARGAIN month of the post-WWII era… The annual surge of investment funds into the market has helped stem the tide of five major bear markets (1946, 1957, 1960, 1962 and 1966) enabling October to become the "bear-killer."
$SPX $ES_F $SPY $QQQ $NYA… pic.twitter.com/zgZsDSyTDW
— Seth Golden (@SethCL) October 3, 2025
🏆 Chart of the Week Analysis: October—Bear-Killer, Bargain Month, and Q4 Catalyst
October’s reputation as the true bear-killer and inflection month couldn’t be better illustrated than in this week’s chart and research backdrop. The historic pattern is clear: since WWII, October has provided “big bargain” buying opportunities and has rescued markets from five major bear events (1946, 1957, 1960, 1962, 1966), igniting strong rallies that usually persist into the most bullish three-month span of the year.
Research from Leuthold, AlmanacTrader, and Finom Group confirms the statistical weight behind October’s seasonals. Average gains for October through early January clock in at more than 5.6% since 1949, with only two losses on record—showing how periodic volume surges and fund flows reset sentiment and institutional allocations. The recent push to all-time highs, robust earnings trends, and resilient breadth have further supported October’s reputation for unleashing recoveries that decisively end correction cycles.
But context matters. Heading into Q4 2025, market dynamics show some cracks: breadth and momentum are softening, technicals highlight a possible mean-reversion, and the government shutdown still looms. Yet the S&P 500 held above its 100-DMA since June, a critical quant signal, and September’s gain keeps the seasonal tailwind intact. Quants note that after a positive September, the likelihood of Q4 gains jumps above 80%, and each new autumn high further cements the upside for disciplined investors.
Despite near-term consolidation risks and more defensive sector leadership, the playbook is unchanged: history rewards those buying October dips rather than those who panic. The “willingness clause” noted in Finom Group’s proprietary March 30th, 2025 (“Long term gains demand short term pain”) research report is vital—endurance, discipline, and conviction through short-term pain compound into the long-term gains that only October and Q4 cycles reliably deliver.
Key Chart Takeaways for October:
• Volatility spikes and defensive posturing are common, but fail to interrupt October’s strong historical positivity rate.
• Breadth softening and headline risk (shutdown, labor market data) require tactical flexibility, but dips remain buyable unless a true macro shock emerges.
• Portfolio leadership is shifting—large cap, quality growth, and broad ETF exposure preferred over speculative small-caps.
• Earnings are on the upswing, supporting the flow-driven recovery and strengthening the bullish outlook into Q4.
The weight of technical, quant, and seasonal data suggests that October, true to its reputation, is set to be the turning point for savvy investors—stay focused on signal, not noise, and see pullbacks for what they are: bear-killers, not bull-traps.
BONUS:
Q4 has always been positive after 4 or more S&P 500 new all-time closing highs in October. October, December, and Q4 performance all improved too. https://t.co/obFfj0mRAz pic.twitter.com/vhfaT0BtgD
— Jeffrey A. Hirsch (@AlmanacTrader) October 7, 2025
October is red 60% of the time when #SP500 stayed above its 100 day SMA from Jun–Sept and finished Sept positive. This year, $SPX weakness is likely front loaded in early Oct. But history shows Q4 ends positive 100% of the time even with a red October with 10.8% drawdown. 10.8%! https://t.co/gZRWsqe3bk pic.twitter.com/JGxF7Wvc0k
— Bluekurtic Market Insights (@Bluekurtic) September 26, 2025
QUOTE(S) OF THE WEEK
Larry Williams:
If you care, you make less than if you don't care.
Fear is the emotional attachment of traders who get ushered out of the markets. So how does an investor not care? Set up win/win investing strategies.
Invest in products and with strategies that deliver: If… pic.twitter.com/GgGDLuMMNY
— Seth Golden (@SethCL) September 1, 2024
Quote of the Day –
“I'm a greater believer in luck, and I find the harder I work, the more I have of it.” – Thomas Jefferson pic.twitter.com/g8ZmgZ3z7k— Bespoke (@bespokeinvest) October 3, 2025
"It's 100x harder to unlearn than to learn." – @jackbutcher
— Morgan Housel (@morganhousel) October 3, 2025
The purpose of knowledge is action.
— Ryan Holiday (@RyanHoliday) October 3, 2025
Not interested in the drawdown you avoided. You don't get paid for taking big or small drawdowns, you only get paid if you buy and it goes higher.
Your SHARP focus is your shortcoming!$SPX $ES_F $SPY $QQQ $NYA $NDX $VIX $IWM pic.twitter.com/ijaRYWuRoO
— Seth Golden (@SethCL) March 10, 2025
TOP 10 TWEETS OF THE WEEK
It’s difficult for markets to find all-time high tops that don’t include $AAPL achieving all-time highs.
Humans have operational goals, expressed through markets, and sometimes it is just that simple!
— Seth Golden (@SethCL) October 7, 2025
Always (ALWAYS!) keep investing! pic.twitter.com/Oo4g9WXyeY
— From Growth To Value (@FromValue) October 2, 2025
Big declines in the stock market don't necessarily mean there's a recession. The stock market is not the economy.
Video https://t.co/tUt4lQqBZz pic.twitter.com/CA8j5kcwgM
— Charlie Bilello (@charliebilello) October 3, 2025
What does sitting in cash cost you?
Sometimes nothing, when stocks are going down. This is particularly true during long bear markets.
But much more often, it’s costing you something, with that something increasing exponentially as the years go by.
Over one-year periods, the… pic.twitter.com/XyHtp6h1Lz
— Charlie Bilello (@charliebilello) October 2, 2025
Our unique way of using Bollinger Bands as a Relative Rotation Graph shows how the S&P 500 Health Care sector moved from below the lower band to above the upper band in just 3 sessions, without an initial expansion in bandwidth (volatility).
Since then, the $XLV ETF gained… pic.twitter.com/KGPMwDXnmb
— Duality Research (@DualityResearch) October 4, 2025
BoA (Hartnett): we are long resources, UK stocks to play AI bubble; bubbles = booms = best played via barbell of bubble (AI) and cheap cyclical assets (that’s commodities today, as AI devours commodities); price action, valuation, concentration, speculation all frothy, and lead… pic.twitter.com/UlC9KQJMMo
— Neil Sethi (@neilksethi) October 4, 2025
S&P 500 – LEADERSHIP
Currently, Utilities and Energy sectors are leading the S&P 500 on a 1-yr and 1-qtr basis respectively.
Historically, this is not healthy leadership for the market.
To get back into "gear," mkt needs Tech, Financials, or Industrials to take leadership. pic.twitter.com/clJKmz3RI9
— Warren Pies (@WarrenPies) March 29, 2025
⚠️ The VIX–realized vol spread is near its highest in a decade!!
Translation: traders are paying up for protection even though the market isn’t moving.
Implied fear is greater than actual fear, a classic late-cycle sign of hedging demand. pic.twitter.com/PFRLcdx0N8
— Schaeffer's Investment Research (@schaeffers) October 5, 2025
Here's the #recession math, ALWAYS
Recession = between 2.5%-3.5% hit to consumer income, tilts into recession, since 1970
Tariffs on $3.2trn imports or 15% Nat. Tariff Tate = $250bn on $25trn of consumer income which = only 1% #tariff tax
Gasoline -5% Y/Y offset by itself.…
— Seth Golden (@SethCL) October 6, 2025
$SPX rolling 3-yr change eclipsed 80%. 10/12 marks the 3-year anniversary of the current bull market (Bespoke Investment Group).
Since 1950, all rolling 3-year change have an eventual and defined correction, some larger than others.
Be aware, not beware!!$ES_F $SPY $VIX $QQQ… pic.twitter.com/xVoPbRu9Cv
— Seth Golden (@SethCL) October 7, 2025
If $SPX rallies 7.7% off its Sep 30 close, that would be a 44.57% 9-month return off its April 8 low. There have only been 4 other instances since 1957 where $SPX had rolling 1-YEAR returns that high or higher. All of those peaks led to negative 1-year returns later (3 of them… https://t.co/9zZUXAtSF5 pic.twitter.com/ygyr9Y0Ru0
— David Settle, CMT (@davidsettle42) October 7, 2025
From Sunday's Thrasher Analytics note…
As a result of massive call buying, vol has been ticking higher. This is sending the correl. between $SPX and $VIX to extremely rare levels. Joining prior instances like 2007, 2018, and 2022…. Each resulting in a higher $VIX. pic.twitter.com/g0UrUtz5IX
— Andrew Thrasher, CMT (@AndrewThrasher) October 7, 2025
I love these three charts from @sonusvarghese.
All tell a similar story. Despite what they keep telling you, household balance sheets are in excellent shape. pic.twitter.com/NJFQAUkkAV
— Ryan Detrick, CMT (@RyanDetrick) October 7, 2025
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FINOM GROUP – RECENT REPORTS
OCTOBER 5, 2025
SEPTEMBER 28, 2025
SEPTEMBER 21, 2025
At 6,600+ There Are Too Many Wallflowers At The Stock Market Dance
SEPTEMBER 14, 2025
September’s Op/EX And The Worst Week Of The Year Await Investors
SEPTEMBER 7, 2025
A Soft Patch To Land The Economy
YOU’RE ALL CAUGHT UP NOW. THANKS FOR READING!
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