S&P 500 AI outlook: leaning down

Following the AI beat buy and hold here: +89.9% vs +79.8% over 1256 days, worst drop -15.9% vs -25.0%.

Why

• Corporate bond spread (Baa) is low (-1.15 sd). In 2484 days of history, higher readings came before better 10-day returns (IC 0.16, t 8.08), so this weighs on the market.
• Oil price is high (+1.55 sd). In 2487 days of history, lower readings came before better 10-day returns (IC -0.101, t -5.06), so this weighs on the market.
• Implied correlation (CBOE COR1M) is low (-1.59 sd). In 2501 days of history, higher readings came before better 10-day returns (IC 0.098, t 4.91), so this weighs on the market.
• Dealer gamma exposure (GEX) is high (+1.78 sd). In 2501 days of history, lower readings came before better 10-day returns (IC -0.073, t -3.65), so this weighs on the market.
• Oil volatility index (OVX) is high (+0.67 sd). In 2501 days of history, higher readings came before better 10-day returns (IC 0.167, t 8.47), so this supports the market.

Crowd psychology: euphoria

• Panic day: fell more than 2.5x a normal move: +0.5% over 5 days, up 54% of the time (26 times)
• Euphoria day: rose more than 2.5x a normal move: -2.1% over 5 days, up 26% of the time (19 times)
• Herding up: 5+ green days in a row: +0.4% over 5 days, up 68% of the time (53 times)
• Herding down: 5+ red days in a row: +0.7% over 5 days, up 68% of the time (19 times)
• Capitulation: 20%+ below its 60-day high: +4.5% over 5 days, up 67% of the time (6 times)
• Near the highs: within 2% of its 60-day high: +0.2% over 5 days, up 63% of the time (331 times)

Coming up (Forex Factory)

• High · USD FOMC Meeting Minutes · Wed, 07 Oct 2026 18:00 UTC
• Medium · USD FOMC Member Waller Speaks · Thu, 08 Oct 2026 08:30 UTC
• Medium · USD Unemployment Claims · Thu, 08 Oct 2026 12:30 UTC
• Medium · USD Prelim UoM Consumer Sentiment · Fri, 09 Oct 2026 14:00 UTC
• Medium · USD Prelim UoM Inflation Expectations · Fri, 09 Oct 2026 14:00 UTC

All AI outlooks

Statistical tendencies from free public data and backtests on real prices. Not investment advice; past results don't predict future returns. How the AI works · Risk Disclosure