The Bullish Setup Hiding Behind the S&P 500’s 2-Week Sell-Off

by | Jan 29, 2026

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There’s a pattern in the market that doesn’t get talked about nearly enough — and we just triggered it.

For the first time since June, the S&P 500 (SPY) fell for two consecutive weeks. That’s roughly six months without seeing back-to-back losing weeks. Most traders would look at that and feel a bit uneasy. Maybe they start thinking the rally’s over or that we’re heading into a correction.

But here’s what I care about: What happens next?

When I look at the historical data, the picture becomes remarkably clear. After the first two consecutive losing weeks following a stretch like this, SPY has been higher 100% of the time over the next six months. And over nine months? Also 100% of the time.

Now, it doesn’t exactly happen often, but that’s not a typo. We’re talking about a perfect track record. When you zoom out and look at the average return over the next 12 months following this pattern, it’s around 15%. That’s a healthy year by any standard.

Short-Term Chop, Long-Term Strength

Now, before you go loading up on calls with reckless abandon, let me add some context. Short term, we might see more volatility. We might see some chop. And honestly, that lines up almost perfectly with what my seasonality analysis has been showing — February tends to run flat.

So yes, the near term may feel shaky, and the tape could look messy. But that’s not the point. The point is what comes after.

These periodic pullbacks — these brief periods of consolidation — are often setups for the next leg higher. And when you pair that with strong market breadth, the case becomes even stronger. The percentage of stocks over the 200-day moving average gives a great read on how many names are at or near all-time highs, and I want to see that above 60 for a good, healthy market breadth.

When breadth holds up during pullbacks, it tells you the foundation beneath the index remains strong.

What This Means for How You Should Be Positioned

I’m not saying you should ignore the short-term noise. If you’re a swing trader or working with shorter time frames, you’ll need to manage through the chop. But if you’re thinking in terms of weeks and months, not just days, this data gives you a framework for confidence.

This isn’t about predictions. It’s about probabilities backed by historical consistency. And right now, the probabilities are stacked in favor of upside.

So while others are panicking over two red weeks, I’m viewing this as exactly what a healthy market does before it rallies. The data supports it. The seasonality supports it. And the setup is right in front of us.

Don’t let short-term volatility shake you out of a longer-term opportunity.

Graham Lindman
Graham Lindman Trading

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P.S. Other Traders Would Ignore a Move Like This

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You’ll Want to See This Right Away

We develop tools and strategies to the best of our ability, but no one can guarantee the future. There is always a risk of loss when trading. Past performance is not indicative of future results. From 10/05/23-12/3/25 the average return per trade winners and losers was 22.38% with an average winner of 91.51% and a 61.8% win rate over a 4-day hold time.

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