Stop Chanting for the Bear. Wipe Off the Pentagram, It’s DeJar-Moo Season.

DeJar-Moo. I think it has to be official, the ghost of the bear has been given up on, and for as much as I would love to see a fast move in a short space of time, arguably it has been seen on Dow and Russell.

This is the ongoing story of the bear season, or cycle. I’ve been talking about this for weeks. Every year we have a bear season, which I’ve also mentioned multiple times. Feb/Mar and Sept/Oct are typically bear seasons, this is when we see the bigger corrective moves and crashes consistently.

Tonight: the bear. Not seen since August. Summoned nightly from candlelit home offices across the land. And still, it will not come.

Summoning a bear takes 3 things: a pentagram, midnight, and a bear willing to turn up. We managed to all be present at midnight a few times.

No matter how many chants, midnight summons and questions to the dark beyond via a long forgotten Ouija board* that no one will confirm or deny was an artifact around the true life Exorcist movies/story, at the very least it’s time to wipe off the chalk pentagram and stop the bear chanting.

*For the record, the board was asked directly. The planchette** went to M, then O, then O, and declined to go any further.

**The planchette is the little wooden block that pedals round the board’s letters, powered by a resident imp who does not take requests.

Déjà vu is the feeling you’ve been here before. DeJar-Moo is the feeling you’ve been here every midterm October, and the bear has never once stayed for it.

It’s time to look at the DeJar-Moo cycle and consider mid October one of the best, or better, bull cycles we can often see. Consider the additional Stock Trader’s Almanac data below.

Scroll down for the Almanac’s midterm October numbers, the bear season by index, and why from this sentiment viewpoint it’s hard to be really bearish any more on the index.

Market Snapshot

• S&P 500 futures: 7,859.75 (+0.04%). Sitting just under the 7,897.50 NATHs line.
• NazQuack futures: 30,755.75 (-0.46%). Below its 31,616.50 NATHs.
• Uncle Dow futures: 52,416 (+0.55%). Leading the strong bull charge.
• Uncle Russ futures: 2,823.5 (+0.40%). Still under 2880.
• Gold: 4,212.7 (+0.40%). Up 16.8 on the day, well under its August highs.
• Crude Oil: 91.95 (-1.30%). Back under 93.
• VIX: 15.39 (+1.25%). Under the 16 line, with the year low at 13.38.
• Bitcoin: 83,678.83 (+2.37%). Between the 80k line in the sand and the 85000 breakout.

Seasonality – one of the best or better bull cycles we can often see

From the Stock Trader’s Almanac over the most recent 31 years (1995 to 2025), October’s average path has built gains as the month goes on, mostly in the second half, with the large caps leading and the Russell 2000 lagging. In midterm election years (1950 to 2022) the pattern is stronger. After some early weakness, all 5 indexes have tended to accelerate higher from around the 5th to 8th trading day, ending the month up more than 3% on average for the Dow, S&P 500, NASDAQ and Russell 2000, and close to 4% for the Russell 1000.

We asked members of the public whether the bear would leave between trading days 5 and 8. A man walking a cow said yes. Today is trading day 9.

In midterm years, October ranks as the best month of the year for the Dow and S&P 500, and second only to November for NASDAQ, averaging roughly 3.2%, 3.0% and 3.2% respectively. The Almanac also marks October as where the “Sweet Spot” of the 4-year presidential cycle typically begins. Q4 of the midterm year plus Q1 and Q2 of the pre-election year has been the best 3-quarter run for the market, averaging 19.3% for the Dow and 20.2% for the S&P 500 since 1949, and 29.4% for NASDAQ since 1971.

Source: Stock Trader’s Almanac, StockTradersAlmanac.com.

The Bear Season – Dow is leading the strong bull charge

Dow futures saw -7.3% over 40 bars or 57 days peak to trough, and Russell futures saw -9.78% over 37 bars or 52 days, whereas the most bear action we saw on the gravity defying AI bull nonsense, S&P futures saw -3.36% over 23 bars or 34 days and NQ futures saw -5.03% over 19 bars or 28 days.

Uncle Russ fell nearly 10% over 52 days. The S&P fell 3.36% and would still like it noted that it had a difficult autumn.

And already Dow is leading the strong bull charge, with what is looking like will be its 4th consecutive bull move, assuming today’s premarket moves hold well, and breaching some prior swing highs to adjust the prior bear sequence we’ve seen over the last several weeks.

Russell is dragging its feet still, but a solid move above 2880 on futures will trip the same bull start gun.

For those that want to see the ETF equivalents: SPY -3.82% over 23 bars, DIA -7.69% over 40 bars, QQQ -4.71% over 21 bars and IWM -10.05% over 38 bars.

And with SPX sentiment at potential turn points for the bull… well, more on that shortly.

SPX – a nice each way bet

SPX short term swings remains with a blank chart again, as we explore the ranges layering on top of price, and you can see the basic version of the TnT tool for clarity.

I’ve marked off the smaller new range, which is on top of the larger daily range we noted last week. Price still remains inside of the range, so in accordance with the 6 money making patterns, price is at range highs but inside the range, price is bearish. However, as price has attempted the breakout, there is also the breakout opportunity too, so as always in such cases, a nice each way bet.

Given the potential for the bull cycle to start, and what could be some rotation in sectors starting elsewhere, price meandering sideways is most likely for the moment.

Until a breakout has officially been triggered.

SPX Sentiment – from one extreme to the other…

The sentiment charts show the number of stocks above or below their respective moving averages. Typically when you see extremes, the market is considered to be over extended one way or the other.

The 200 MA, bottom left, shows 43% of stocks on the S&P 500 are now above their 200 period moving averages. We only normally get into that bottom 20% extreme during those big fast corrective moves, and we have not seen one (yet). This could be a good location for those longer term dip buyers.

The top left and middle charts show that we are at or near that lower extreme, the bottom 20%, and are at prior turn points for the year.

From this sentiment viewpoint it’s hard to be really bearish any more on the index.

Crude Oil – multiple layered ranges developing and evolving

CL crude oil can also see these multiple layered ranges developing and evolving. In a similar way, we have seen the updated smaller range see an attempting bull breakout, and now breaking back into that range at the descending VWAP, so a bear move could well be likely.

I’ve marked off the range low target as usual, but with higher swing lows in development over the last several days, the range mid point may be a more realistic, suitable target.

It doesn’t matter too much, as usual, when selling premium. NOT UP is all we are saying for the short term trade to be profitable.

Bitcoin – patterns WILL evolve with new information

BTC Bitcoin continues to evolve and mutate, and the dreaded month of sideways looks like another reality before any potential fast and furious move in any direction. The latest range has mutated once again and now looks more like a descending range or channel.

This again serves as another reminder that patterns WILL evolve with new information, and when you add the prior trend and breakout moves we have been trading…

Bitcoin has now been a range, a box and a channel, and is considering a career in flags.

This adds up to what most would consider a bull flag pattern. A breakout move above 85000 could see price get to around 93000, which is not far away from the prior breakout target 2 already marked and waiting for price to get to.

Similarly, this also highlights that while there are a dozen ways to do something, in this case find a pattern target, they will often overlap or be similar. So it’s not a case of which is the best way to do something, it’s more a case of what makes most sense for you to do consistently that is reliable for you.

It doesn’t matter which you choose, choose one. You’re looking at a target zone that often lines up with any of a dozen different ways, methods or patterns you could choose from. People think what they did was wrong, or that someone else is right, and doubt creeps in. So when you think about a zone, a lot of different ways land around the same zone, which makes them all right and no individual one wrong. Corresponding points of data, if you want to look at it that way.

The bear will be considered below 80k. We’re not there, so it’s just a line in the sand for the moment.

Premium Poppers & Wall of Wins – following the process

I didn’t trade again, the community did, so a big round of applause for their good work in following the process. The wins reported are catching up from Friday’s wins as well.

• ehvpsd: “RUT BPS filled for 50%. Nice way to finish off the week..”
• Don E.: “Closed SPX LP for 45%, have a good weekend.”
• Chris: “Converted SPX for $.50”
• Bill S.: “SPX win as well. 40%”
• Steve R.: “BoomChakalaka”, with a P/L Day screenshot reading 3,109.00.
• Scott K.: “Unfortunately, loss day on RUT BO1. Would have closed OK, but stop loss hit.”
• James D.: “Closed the SPX popper early as I didn’t like the sideways action but took a small profit, let the RUT run and closed it at 45% profit.”
• Bill S.: “Made my 50% on the SPX; I remained patient this time.”
• James D.: “Bear wins at 45-50% on RUT and SPX PP!”