Wayne Whaley

Market's now pricing in a 70% chance of a Fed Hike at the October FOMC meeting as well as a 50% chance that Fed Chairman Warsh will accidentally fall out of the window of a 20 story building by year end.

THE SOFTEST S&P SEASONAL WEEK OF THE YEAR The September Options Expiration (Opex) occurs on the Third Friday of September each year. The impact that Sept Opex's have had on equity prices appears to have evolved over the last 50 years given that since the six consecutive positive Sept Post Opex weeks from 1982-1987, twenty-nine of the last 38 of those weeks after the third Friday in September have been negative. You get very similar results if you just simply look at the S&P performance from Sept19-26. Note, there have been eight Sept19-26 weeks in the last 50 years with at least a 3% weekly loss with a best case weekly gain of 2.42%. There are many variables which impact the direction the S&P takes each week and anything the S&P might do next week will not surprise me but seasonally it has proven to be the softest week of the year. One of 17 studies shared with Whaley Study Subscribers on various markets this weekend. waynewhaley.witterlester@gmail.com for subscription inquiries.

THE S&P MONTHLY SEASONALS In the top table below is an update of the S&P monthly seasonals from 1950 through August of 2026 listed in Chronological Order on the left and Order of Performance on the right. The Whaley performance rating is based on an avg that underweights outliers so that a 9/11 type anomaly doesn't drive the results. That measure leans back toward the median, but not completely, as all years are considered. In an effort to make the measure more easily comprehendible, it is then normalized to -100 to +100 in -3 to +3 standard deviation fashion October's performance has improved measurably since 1990 going 23-13 since 1990 for an avg gain of 1.47% as opposed to 22-18 from 1950-1989 for an avg gain of 0.38% with 1987 (-21.7%) weighing heavily on the latter avg. Thus, the motivation for posting the second list of shorter duration arbitrarily chosen from 1980. October was the one obvious big mover from 1950 to 1980 list with November and April 1 & 2 in both list while September and February brought up the rear in both. The volatility measure in the far-right column is based on the avg daily move observed in each month. October was the most volatile month over both periods while the holiday laden month of December, the least. Personally, I like to take the monthly collars off seasonal performance and I maintain a list of the top ten most aberrant periods during the year over the last 50 years for the 14 markets I maintain databases on which is based on an evaluation of all 10614 time frames during the year from 7 to 35 calendar days across the year with the top ten mutually exclusive cases then being identified. And acknowledging that trends can evolve over time and taking note of the October phenomenon, that model's rating methodology gives twice as much weight to year 50 as it does to year 1. I maintain a second list of the Top 100 Multi Market Seasonals which is a merger of all 14 markets. waynewhaley.witterlester.witterlester@gmail.com for Weekly Study subscriber inquiries.

The S&P was down in March, Up in April, Up in May, Down in June, Down in July, and likely Up in August. The only other post 1950 year in which a DUUDDU six month pattern occurred between March and August was 2008. A pretty useless piece of information that makes for an interesting conversation topic.

WOULD A THIRD QTR CONSOLIDATION SIGHTING BE 4TH QTR FRIENDLY? The S&P was up 9.55% in the First Half of 2026 which has historically been a good omen for the Fourth Quarter, given that, There have been 39 years in the 76 since 1950 in which the First Half of the S&P Year was above the 5% norm and the following 4th Quarters were 33-6 for an avg Quarterly gain of 5.36%. Interestingly, history suggest that given a strong start to the year, some Third Quarter consolidation of gains might be Fourth Quarter Friendly. For example, in those twelve cases since 1950 in which a +5% First Half of the Year was followed by a negative Third Quarter, the following Fourth Quarters were 11-1 for a gaudy 8.64% avg gain with one fractional loss (0.69%) in 1983. Conversely, when a +5% First Half of the Year has been followed by a +5% Third Quarter, the Fourth Quarters have been a bit more pedestrian going 10-4 for a 1.91% gain, in line with avg Quarterly returns and much below the post 1950 "Fourth" Quarter norm of 4.2% and a major ouchy in 1987. The 9.55% First Six Months of 2026 suggest we should be prepared to warm up to equities in the Fourth Quarter. If a negative Third Quarter should present itself, this study suggests there is a case to be made for an outright Fourth Quarter love fest. As of August21, the S&P Third Quarter is up 2.46% and some would astutely argue they will take the Third Quarter 'Bird in Hand' as opposed to the Fourth Quarter promise of "Two in the Bush' should the Third Qtr fail. There is some merit to that position. This study will become more relevant as we see how the Third Quarter S&P shapes up. We shall revisit in a month and many others will now post a variation. The giveaway study from the eleven shared with Study Subscribers this week, waynewhaley.witterlester@gmail.com for info.

THE S&P MADE NEW HIGHS ON AUG 4TH & 7TH - DOES IT MEAN ANYTHING? The following is an excerpt from a New High Summary Study I have done over the years on the impact of New Highs in each of the 12 months of the year and shared with Study Subscribers this week ~ waynewhaley.witterlester@gmail.com On Tuesday, August 4th, the S&P posted its first New 12 Month Highs since June 2nd and then proceeded to repeat the feat on Friday, August 7th. In the below table is a summary of post 1950, performance after New 12 Month Highs are made in each of the 12 months. For perspective, one should keep in mind that since 1950, the S&P is up 74% of rolling 12 month periods for a 9.4% avg annual gain. Only a handful of the months in the New High study exhibited post New High 12 Month performance substantially different than that of random years. The recent New Highs in August appear to do little to bolster the bullish case and one could even argue it tends to stymie forward performance expectations. The 2026 Bullish case missed out on the New Highs in February that it covets each year but did receive Equity Friendly New Highs in the months of January. Additional New Highs this year in April, May & June appear to have little consequence other than to provide forward performance estimates in line with historical norms. Other studies we reviewed this week suggest 2026, looks a lot like 2013, 1995, 2017 & 1976 and the case for a strong 4th Qtr rally would benefit from consolidation in the next 8 weeks.

A 25-0 S&P SETUP FOR JUNE26-JULY15 The S&P was down 1.95% during the week of June19-26. Cutting the last 50 years database in half by focusing on those 25 "Nearest Neighbor" cases to this year's -1.95% June19-27 measure produces the below dataset consisting of those June19-26 performances ranging from -3.8 to -0.1%. The S&P was 25-0 in the following June26-July15 time frame in the aforementioned 25 cases for an avg nineteen day gain of 3.33%. Nineteen of the 25 cases had less than a 1% Drawdown during the reaction period. In 12 of the 25 cases, June 26 was the Low (No Drawdown). One of 18 multimarket studies shared with Study Subscribers last week. waynewhaley.witterlester@gmail.com for Study List inquiries.

BUYING THE S&P ON A VIX OF 35 On Monday, March 9, the S&P Vix reached 35.3 intraday before closing at 25.5 after the midday S&P reversal. I have OHLC daily Vix data from 1990. The below table shows the results of Buying the S&P on the close on any day since 1990 in which the intraday Vix exceeded 35 and then selling it on the close on the first day in which the intraday Vix trades below 20. I see twenty-three, post 1990, cases of this setup taking place and 22 of them were profitable trades. This study was shared with my subscribers on March 9. The Bears among my audience were quick to point out that there were six double digit drawdowns in my case set suggesting often much lower Lows were experienced before eventually working higher and if Vix is going to +50 as it does in the Big Boy Bear Markets, 35 is simply a rest stop. The Bulls are of the opinion we are at this moment in the process of putting in that promised follow up downward leg of the bottom foundation. In a follow-up study I noted that if, similar to 2026, the Buy setup occurred within 10% of the prior high, you eliminate the four biggest drawdowns. The Bears responded, 'Cherry Picking Bull Sh*t' .... Possibly, we will see. Interestingly, with all this going on, we are only 4.96% from the January 27th Closing Low. The Bulls argue a sign of resiliency. The Bears note plenty of room left to go downward before stocks are reasonably priced, especially with the likelihood of 2026 rate cuts dropping as Oil searches for a +100 resting spot. The "# Days" column is trading days. The avg trade length was 78 trading days, about 3.7 calendar months. waynewhaley.witterlester@gmail.com for subscriber information.