Benjamin Cowen says the S&P 500 is likely setting up for its typical midterm-year correction, with history pointing to August through September as the highest-risk period.
Key Points
Key Highlights:
- July has been one of the strongest months for the S&P 500, but August and September are historically the weakest, especially during U.S. midterm election years
- Cowen says this year's price action is following the same pattern as 2014, 2018, and 2022: a shallow June pullback, a July rally, then a larger correction later in Q3
- In the last three midterm years, the S&P topped in August or September before falling 10% to 20%
- He believes the current rally is likely the final push before that seasonal correction, rather than the start of another sustained leg higher
- A stock market correction during August or September could also pressure Bitcoin, as BTC has historically found major cycle lows during these late-year equity pullbacks
Takeaway
Cowen isn't calling for an immediate crash, but he believes the higher-risk window is still ahead. If history repeats, the current rally could give way to a 10% to 20% correction in late Q3, with the S&P and Bitcoin potentially weakening together.
