There is little doubt that a significant amount of uncertainty still hangs over the market, the US economy, and the future of global trade. But based upon our work, the bottom could be in, at least in the short term. We are going to look to reestablish positions in the Invesco QQQ Trust (QQQ) and iShares Russell 2000 ETF (IWM), writes Jeff Hirsch, editor-in-chief of The Stock Trader’s Almanac.
Key signals are: The retreat in the CBOE Volatility index (VIX) from around 60 back down to around 30, our own waterfall decline research, and the Republican post-election year seasonal trend. Additionally, the bounce since the recent announcement that most of the tariffs were being paused for 90 days has held – and longer-dated Treasury bond yields appear to have calmed down.
![[S&P 500 Post-election year Seasonal Chart & 2025]](https://msgraphics.blob.core.windows.net/content/article-img/tradingidea63942.jpg)
Looking at the familiar S&P 500 Index (SPX) Post-Election Year Seasonal pattern chart above, all of the patterns show some degree and duration of strength from around now through sometime between early June to early August, before the next bout of seasonal weakness could arrive. The 90-day tariff pause, if it does last the full length, would theoretically end in the first half of July – and could be a potential catalyst for additional market weakness and volatility sometime in Q3.
Between now and then, we believe the market could give the Trump Administration the “benefit of the doubt” and/or “until proven otherwise” with tariffs and associated negotiations. But the administration likely has a limited amount of time to start showing progress and announce new meaningful trade deals. Deals with Japan, and/or EU member countries are what we would consider meaningful.
