Founder’s Note: Quantitative Analyst Grant Hawkridge has an innate capacity to cut through the b*llsh*t narratives.
It’s one of my favorite things about him.
Here he is with a stack of charts to explain what’s really happening in the stock market right now. – JC
By Grant Hawkridge
- Know your season before you step outside.
- Context beats prediction, every time.
- Ignore the noise, trust the trend.
G’day, Grant here again.
The seasons are shifting.
In the U.S., winter is coming fast. Down here in Australia, summer is heating up.
Two completely different environments, and completely different behaviors.
You don’t mow the lawn in a blizzard, and you don’t wear shorts into a snowstorm.
Markets work the same way. Before you put capital to work, you need to know the environment.
Is it a bull market or a bear market? Sunshine or storm clouds?
Knowing the Market Season
Every investor operates better when they understand the backdrop.
Momentum works in bull markets. Mean reversion works in bear markets.
The edge is not in predicting what comes next. It is in recognizing where we are right now.
Despite the noise, fear headlines, and endless doom loops on TV, the evidence says we are still in a bull market.
Let’s look at the data.
If you want to know the truth, start with participation.
The S&P 500 is trending higher, and internal breadth is improving.
The NYSE and NASDAQ 10-Day Net New High Advance-Decline Line has been rising for 115 trading days, showing that more stocks are making new highs than new lows.
Since 2000, when this breadth metric has been rising, the S&P 500 has gained an average of more than 8% per year.
When it has been falling, the index has lost 1% per year.
Breadth is participation, not opinion. And right now, participation is expanding, which is exactly what bull markets are built on.
Breadth tells us what’s happening inside equities. Risk appetite shows how capital is being deployed across the broader market.
The Intermarket Risk Radar gives us that cross-asset view.
It tracks 10 key ratios across equities, bonds, commodities, currencies, and credit to measure risk appetite in one composite score.
A Risk-On environment means investors are favoring growth, high-beta, and cyclical assets.
Risk-Off means capital is rotating toward defensives and safe havens.
Right now, the composite sits near 0.71, a strong Risk-On reading. Capital is still flowing toward offense, not defense.
This composite has been hovering in Risk-On territory for most of the time since May, showing that investors have consistently preferred exposure to risk assets.
That consistency tells the story.
When capital keeps flowing into growth and cyclical areas for months at a time, it signals an environment where investors are still leaning toward opportunity rather than protection.
That kind of Risk-On behavior tends to show up in strong market cycles, and 2025 has been no exception.
The S&P 500 continues to track the typical post-election year pattern almost perfectly.
Since 1950, these years have often started with some early-year volatility before gaining strength through the middle and finishing strong into year-end.
So far, 2025 has followed that same rhythm almost step for step.
Post-election years tend to finish strong as uncertainty fades and buyers step back in.
That tailwind often leads directly into one of the strongest seasonal stretches of the year.
The final quarter of the year has a clear upward bias.
Since the 1950s, October, November, and December have been the most reliable stretch for the S&P 500, delivering consistent and above-average returns.
This is the period when momentum often builds, participation broadens, and year-end strength takes hold.
The final piece of the puzzle comes from sentiment.
Bull markets need bulls.
They do not thrive on fear or skepticism. They build on confidence and participation.
Our TrendLabs Sentiment Composite sits near +1.0. That is optimistic but not extreme. The upper red zone marks greed and euphoria, and we are still well below that line.
Confidence is improving, but the crowd has not gone all in. Optimism is building without complacency, leaving plenty of room for more bulls to join the trend.
Bull markets need fuel, and that fuel is belief. Right now, there is still plenty left in the tank.
Across price, participation, risk, the post-election cycle, year-end seasonality, and sentiment, the evidence points in the same direction.
We are in a bull market. The data says it. The trend confirms it.
Trends Over Stories
When you step back and read the environment, not the headlines, the message is clear.
Rising trends, broad participation, healthy risk appetite, favorable seasonality, and bullish sentiment.
That is not what bear markets look like.
So do not dress for winter when the market is still in summer.
The environment matters. Right now, the forecast still says sunshine.
If that changes, we’ll adjust. And you’ll hear it from TrendLabs first.
Stay sharp,
Grant Hawkridge
Quantitative Analyst, TrendLabs