--- title: "Centennial Historical Patterns Indicate a \"Favorable Window\" for U.S. Stocks; Analysts Bullish on the Next 18 Months" type: "News" locale: "en" url: "https://longbridge.com/en/news/295601642.md" description: "Jay Kaeppel, a strategist at SentimenTrader, discovered a seven-year cycle in the U.S. stock market based on historical data. During the 18-month \"favorable\" phase, the historical probability of gains is as high as 90%, with an average increase of 26.8%. The next \"favorable period\" is set to begin on October 30, 2025. Notably, however, the S&P 500 has already risen by more than 26% during the current \"unfavorable period.\"" datetime: "2026-08-12T02:03:29.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295601642.md) - [en](https://longbridge.com/en/news/295601642.md) - [zh-HK](https://longbridge.com/zh-HK/news/295601642.md) --- # Centennial Historical Patterns Indicate a "Favorable Window" for U.S. Stocks; Analysts Bullish on the Next 18 Months Historical data suggests that U.S. stocks may be about to enter an 18-month "favorable" cycle. According to a recent report by MarketWatch, Jay Kaeppel, a technical strategist at SentimenTrader, pointed out in a research report sent to clients and MarketWatch that, based on historical data from the past 106 years, the U.S. stock market exhibits a seven-year cycle pattern. According to this pattern, the next "favorable" phase will officially begin on October 30, 2026. Kaeppel wrote, "Over 100 years of history indicate that the probability of a bull market will increase after October 30 of this year." ## How Does the Seven-Year Cycle Work? The logic of this cycle is that each seven-year cycle is divided into two sub-cycles of 3.5 years each. Each sub-cycle is further subdivided into an 18-month "favorable period" and an 18-month "unfavorable period." Data shows that over the past 106 years, the probability of the S&P 500 rising during the "favorable period" was 90%, with an average gain of 26.8% and a median gain of 29.1%. In contrast, during the "unfavorable period," the probability of a rise was 69%, with an average gain of only 4.9%. The difference does not stop there. The maximum loss during the "favorable period" was only -26%, whereas the maximum loss during the "unfavorable period" reached as high as -69.5%. In other words, the "favorable period" not only sees higher gains but also milder declines. Interestingly, we are currently in an "unfavorable period." Since this phase began on February 13, 2025, the S&P 500 has accumulated a gain of over 26%. According to FactSet data, this increase has already exceeded the historical average for "favorable periods." This means that even during a phase that theoretically performs weaker, the market has delivered impressive results. Some investors are concerned that this AI-driven bull market, approaching its fourth anniversary, may be "showing signs of age." However, Kaeppel's research offers another perspective. ## The Pattern Holds, but the Reason Remains a Mystery Kaeppel himself remains cautious. He admits that he has "always struggled to explain why this seven-year cycle appears so effective." This is not uncommon. Market researchers have identified numerous calendar effects, and the seven-year cycle is just one of them. Kaeppel's stance is that sometimes, the most pragmatic approach in investing is to follow patterns that have historically worked, without insisting on a theoretical explanation. It is worth noting that historical patterns are not predictions. Past performance does not guarantee future results, a point Kaeppel explicitly highlighted in his report. U.S. stocks generally declined on Tuesday. The S&P 500 fell 0.32%, the Dow Jones Industrial Average dropped 0.34%, and the Nasdaq Composite Index decreased by 0.60%. 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