The Stock Traders Almanac is calling for what it describes as a “monster Q4 rally” that could send the S&P 500 to 7100 by the end of 2025. In its October outlook, the firm argued that bearish seasonality has failed to materialise this year, setting the stage for a powerful year-end surge.
“After the tariff tantrum that sent the S&P 500 down 18.9% on a closing basis to the April 8 low, the market has soared for five months straight,” the Almanac wrote. “So much for ‘Sell in May’ this year.”
The firm added: “When bearish seasonality doesn’t transpire it is a bullish indication that more powerful forces are at play.”
The S&P 500 logged eight new all-time highs in September, typically one of the weakest months of the year.
According to the Almanac, this is a bullish historical signal. “Q4 performance has historically been solid but it also improved following five or more new all-time highs in September with only one loss in 8 years,” it noted, pointing out that the only fourth-quarter decline in such cases was in 1967.
The firm acknowledged potential headwinds, including “valuations running hot, a few disappointments from the AI Tech camp and another looming government shutdown.”
But it sees any near-term pullback as short-lived. “We still anticipate any pullback or retreat to be relatively brief and shallow,” it said.
Ultimately, the Almanac expects the bull market to regain momentum. “After this dip we expect a banner Q4 rally that should drive the S&P 500 up to 7100 by year-end for another 20% yearly gain,” it concluded.
Source :
https://www.investing.com/news/stock-market-news/q4-monster-rally-to-drive-the-sp-500-to-7100-by-yearend-strategist-4257260
