S&P 500 Cycle Analysis & Price Targets: December 2025 Forecast | 18-Month Trading Roadmap.
Introduction
In my previous analysis, I highlighted 6,500 as a critical level for the next 40-week cycle formation.
Since then, the market has evolved significantly, providing us with valuable insights for the coming months.
This update examines the S&P 500’s behavior across multiple timeframes, from the broad 18-month cycle down to the shorter 40-day cycle. Understanding these cycles helps identify potential market turning points and trading opportunities.
By analyzing price action relative to cycle lines and historical patterns, we can better anticipate future movements. Let’s explore what has transpired and what lies ahead for investors and traders.
The 18-Month Cycle
Despite a 5% correction from the October 29 high of 6,920.34, the S&P 500 remains in a bullish trend. The index continues trading well above its cycle line (FLD – Future Line of Demarcation).
The projected low for this cycle is expected between September and October 2026.
This long-term perspective suggests the current correction is temporary within a larger upward trend.
The 40-Week Cycle
The October 29 all-time high is confirmed as the 40-week cycle peak. This peak formed on the right side of the cycle, suggesting a moderate correction ahead.
The maximum downside target should be the 40-week cycle line.
There’s a strong possibility the 40-week cycle low will form earlier than expected, potentially in January. The most likely timeframe is during the first two weeks of December.
Analyzing shorter cycles will provide clearer timing signals.
The second 40-week cycle peak since the April low is expected around May 2026, with its low between September and October 2026.
The 20-Week Cycle
Currently, the last 20-week cycle low is best labeled at the end of July. Following this analysis, I expected the second 20-week cycle low during the week of November 17.
To maintain Hurst’s nominal average, a longer second 20-week cycle is possible, extending up to 23 weeks. This would place the low around January 5, 2026, coinciding with the 40-week cycle low due to Hurst’s synchronicity rule.
If the next 20-week cycle forms within the next two weeks, this confirms continued bullishness in U.S. markets.
Technically, this 20-week cycle should cross below its cycle line to provide a downside target near the 40-week cycle line.
If the S&P 500 finds support at its cycle line and rebounds sharply during low formation, this confirms the bull trend remains intact.
The 18-Month Cycle Roadmap
I’ve added an 18-month cycle roadmap to this update.
This tool helps identify our position within the current cycle.
For trading signals, we use the 20-week cycle line.
Point zero represents the last 18-month cycle low at 4,805.34 in April 2025.
The blue line shows the ideal price pattern when three cycles combine in balanced markets.
The red dashed line represents the 20-week cycle line (FLD). For detailed information about roadmap construction and cycle lines, visit my website at tradingmarketcycles.com, where comprehensive articles explain cycle mechanics.
The market crossed above its 20-week cycle line during the week of May 11 at 5,847, projecting a potential upside target of 6,859.
The S&P 500 formed its first 20-week cycle peak during the last week of July at 6,427.02. As expected, the index declined toward its first 20-week cycle low.
Technically, the market should find support at its cycle line before rebounding toward the 40-week cycle peak. However, the market’s strength resulted in a first low of 6,212.69, well above the cycle line.
The index then rebounded to form the 40-week peak at 6,920.34 on October 29, meeting its 6,859 target triggered May 11.
Traders entering at the May signal achieved 1,012 points profit, representing slightly over 17% gain in approximately five months.
After forming the second 20-week and 40-week peak, markets typically cross below the cycle line, providing downside targets.
The red arrow show where we are currently within the cycle.
However, given market strength, the S&P 500 may find support at the cycle line instead of crossing below.
After crossing below the cycle line and forming the second 20-week low, balanced markets typically cross back above the cycle line in technical analysis. This provides the final upside target for the 18-month cycle peak.
Following the 18-month cycle peak, the S&P 500 should cross back below its cycle line, establishing a downside target.
Before reaching the ultimate low, the index will form an initial low, then rebound toward the cycle line without crossing above, using it as resistance.
The decline then resumes toward the fourth and final 20-week cycle low, completing the 18-month cycle.
How do we know when the 18-month cycle has completed?
Since stock market cycles synchronize at their lows, the S&P 500 crossing above its 80-day cycle line confirms the 18-month cycle conclusion.
Roadmaps can be constructed for any cycle length, from 10-day to 18-month cycles.
With two positive trading signals this year, the 20-week cycle maintains a 100% success rate.
The 80-Day Cycle
The last 80-day low occurred October 10, representing the first 80-day cycle from the previous 20-week cycle low.
Knowing two 80-day cycles exist within one 20-week cycle, and the second typically shows weakness compared to the first, we expect the S&P 500 to reach its 6,386.60 target.
This target was triggered November 18 when the market crossed below its cycle line at 6,653.97.
The potential profit from this signal is 311.37 points or 4.67%. The time target for this 80-day cycle low is December 17.
On November 17, the S&P 500 crossed below its 80-day cycle trend line, confirming the October 6,920.34 all-time high is at least the 20-week cycle peak.
80% is the success rate, for the 80 day cycle, indeed the 80 day cycle have 4 out of 5 of positive signals.
On the 80-day cycle roadmap, the red arrow show where we are currently within the cycle.
The 40-Day Cycle
The S&P 500 generated a new signal November 18, crossing below its cycle line at 6,700, establishing a potential 6,480 downside target.
Last week’s low of 6,574.32 likely represents the 40-day cycle low.
If correct, the next low should form around December 22.
The market should rally until approximately December 2 before resuming its downtrend toward the next 40-day cycle low.
By crossing below its cycle trend line November 17, the S&P 500 confirmed the October 29 peak as the 80-day cycle high.
With 3 positive signals out of 3 we have a 100% success rate for the 40 day cycle.
Conclusion
The S&P 500’s multi-cycle analysis reveals a market in transition, balancing bullish momentum with technical correction requirements. While the 18-month cycle remains healthy and above critical support levels, shorter cycles suggest temporary weakness ahead.
The most critical period appears to be early December through late December, when multiple cycle lows may converge.
Traders should monitor the 40-week cycle line closely, as the market’s response will determine trend continuation.
The roadmap approach provides systematic guidance for navigating these fluctuations.
With proper risk management and cycle awareness, opportunities exist for both long-term investors and active traders.