There’s been a lot of noise the last couple weeks, so this is my attempt to distill it into something that’s actually useful.

We just received another reminder that markets don’t move in straight lines. After a nearly flawless 7-month rally, volatility has officially returned—and despite the headlines, that’s completely normal. With year-end approaching and 2026 on the horizon, here’s where things stand and what the historical data says is most likely next.

Volatility returns after one of the smoothest rallies in decades.
The S&P 500 finally dipped below its 50-day moving average for the first time since April, ending a 198-day uptrend—one of the longest since 1950. That stretch also included a rare 40% rally without even a 5% pullback. Historically, breaks in long uptrends don’t predict what happens next, but they do signal the start of more normal market behavior: occasional chop, scarier media, and sharper daily moves.

Consider the following three charts for clues on where the market may go at least in the short-term.


The panic index reached its highest point since the sweeping tariffs in April. Since, stocks rallied 40% from that low.


The Zweig Breadth Thrust Indicator reached an oversold level. Other instances are highlighted overtop the S&P 500 price chart.


Seasonality is currently in our favor. On average, November sees a market swoon before Thanksgiving followed by a strong month-end and an even stronger December.

That’s short-term but what about over the next year?
A lot can happen and there are areas worth watching: record-high housing affordability gaps, rising credit card and subprime auto delinquencies, and modest inflation. But we’re also seeing improving market breadth, stabilizing earnings, and still-no-sign-of-recession in forward-looking indicators. A mixed picture—but still a constructive one.

In years without a recession—and 2026 still fits that profile as of now—stocks post double-digit gains nearly 70% of the time. In fact, over 86% of non-recession years end positive. The takeaway: volatility doesn’t cancel the underlying uptrend, it usually just fills in the path between point A and point B. And in a midterm year, there will probably be plenty.

A Rotation We Haven’t Seen In a While
We’re also seeing something we haven’t seen much of over the last two years: real sector rotation. The MAG7 and other high-beta names have pulled back sharply—many down 15-25% from recent highs—yet the major indexes are holding up far better than expected. Why? Because the “other 493” are finally carrying their weight.

Their earnings have grown 14.7% YoY in Q3, versus expectations of just 5.9%. That’s a huge upside surprise and a major reason the equal-weight S&P, industrials, financials, energy, and parts of healthcare have quietly absorbed the weakness from mega-cap tech. It never feels great when the biggest winners cool off, but broadening earnings power is one of the healthiest market signals you can get.

And it’s not only the mega-caps under pressure. Some of the smaller, non-profitable AI and quantum-computing names have been chopped in half over the last few weeks. When liquidity tightens, the market naturally rotates toward higher-quality companies, and the speculative areas take the brunt of the volatility. It also shows just how stretched certain corners of the “future tech” trade had become.

Crypto crash: a massive reset has created a potential long-term setup for those who have been crypto curious.
Speaking of future tech, the four major crypto coins — Bitcoin, Ethereum, Solana, and XRP — are all down at least 40% from their highs and are among the worst-performing major assets of 2025. Just a couple months ago, they were some of the best. For anyone who’s been around crypto long enough, this isn’t unusual. In fact, zooming out, these pullbacks are modest compared to prior cycles.

What’s different today is the access. Spot crypto ETFs now allow investors to own the asset directly in a brokerage account or IRA, without wallets, private keys, exchanges, or extra tax complexity. Historically, these reset periods have been where long-term positions are built, not abandoned.

Here’s a quick primer on each coin:
Bitcoin (BTC): the decentralized “digital gold” with a fixed supply.
Ethereum (ETH): the programmable platform that powers smart contracts and most blockchain applications.
Solana (SOL): a high-speed, low-cost chain increasingly used for tokenizing real-world assets.
XRP: a blockchain designed for instant, low-cost global payments.

Crypto will always be volatile — that’s part of the trade-off. But spot ETFs add legitimacy, transparency, and dramatically easier access for investors.

I also want to acknowledge that many people (myself included) have been understandably skeptical of the crypto space over the years. These aren’t companies with earnings, dividends, or traditional cash flows. They behave more like commodities or early-stage technologies—driven by adoption, network usage, and sentiment rather than profits. Any hesitation isn’t a flaw; it’s rational.

If you’re curious about adding a modest allocation or want to understand where crypto may fit in a diversified plan, feel free to reach out and we’ll figure out if it makes sense for you. I now have investment models that incorporate these four coins with a small target weighting relative to your overall allocation.

This post is an excerpt from a private client newsletter on 11/23/2025.