Video summary

S&P 500: Seasonal Correction Starting in August/September?

Main summary

Key takeaways

Finance

Key finance takeaways (S&P 500 seasonal drawdown thesis)

  • The speaker suggests the S&P 500 may experience a 10%–20% drop starting in the August–September window, following:
    • a shallow correction earlier (June), and then
    • a rally back up in July.
  • The argument is framed as seasonality + “distribution phase” behavior:
    • June: shallow correction (few weeks)
    • July: rally (often green month on average)
    • Late summer (Aug–Sep): larger correction leading to weakness for the remainder of the midterm year

Market seasonality evidence cited (midterm years)

The speaker states that, historically for the S&P 500:

  • July has been green since 2015
  • The two months that are “most red on average” are August and September

They also cite example drawdowns from “recent midterm years”:

  • 2022: top in mid-August, followed by about a -19% drop
  • 2018: top in mid-September, followed by about a -20% drop
  • 2014: correction starting in September, magnitude stated as about ~10%

They emphasize a recurring pattern:

  • Small correction early
  • Rally
  • Then bigger correction late Q3 / early Q4
  • Potentially remaining weak afterward

Bitcoin linkage (macro / cycle timing)

The speaker claims the thesis may also apply to Bitcoin:

  • Bitcoin often bottoms in the stock-market correction occurring in the back half of the midterm year.

Therefore, they suggest the following potential alignment:

  • If Bitcoin shows weakness in August or September while the S&P 500 enters its typical seasonal correction, they expect possible cycle alignment, including:
    • a major Bitcoin market-cycle bottom, and
    • a potential low for the S&P around the same period.

Caution / uncertainty: the speaker notes they don’t know the exact catalyst, only that the timing is likely seasonal/cyclical.

Potential catalyst mentioned

The speaker guesses the correction could be driven by the semiconductor industry, citing:

  • Semis were “elevated” recently.
  • A semiconductor correction could help trigger/tie into the seasonal S&P correction.

Instruments / tickers mentioned

  • S&P 500 (broad index; no specific fund/ticker given)
  • Bitcoin (referred to as “Bitcoin”; no specific ticker given)
  • Semiconductor industry / semis (sector reference; no specific stock/ETF tickers provided)

Methodology / framework (step-by-step, as described)

  1. Review midterm-year seasonality for the S&P 500
    • Look for shallow June correction
    • Expect July to rally (often green)
    • Then anticipate sideways-to-distribution behavior
    • Followed by a bigger Aug–Sep correction
  2. Validate timing by comparing with past midterm-year patterns (notably 2014, 2018, 2022)
  3. Cross-check with Bitcoin cycle behavior
    • If Bitcoin weakens in Aug–Sep, infer possible cycle alignment and potential bottoms for both markets

Key numbers and time windows

  • Forecast window: August–September
  • Expected magnitude (S&P 500): 10%–20% drop

Historical reference drawdowns:

  • ~-19% (2022): from mid-August top
  • ~-20% (2018): from mid-September top
  • ~-10% (2014): from September correction start

Pattern timing emphasized:

  • June: shallow correction
  • July: rally
  • Late Q3 / early Q4: larger correction and potential continued weakness

Disclosures / disclaimers

  • No explicit “not financial advice” disclaimer appears in the provided subtitles.

Presenters / sources mentioned

  • Presenter: “Hey everyone” host (name not provided in subtitles)
  • Channel / site: Into the CryptoVerse (intothecryptoverse.com)
  • Event: ITC conference “Investing Through the Cycles”, Nov 20–22, Miami, Florida (speaker not individually named)

Original video