Leuthold’s Major Trend Index held at Low Neutral in its latest report, even as a sharp sell-off rattled markets in the first week of November. Following Tuesday’s midterm elections, equities posted their worst session since April 2025, with the S&P 500 falling 4.4% to its 200-day moving average and the Nasdaq dropping 5.5% into correction territory as the AI/momentum shakeout spread market-wide. Offsetting those technical downgrades, the average stock’s 8% outperformance over the past month lifted equal-weight relative strength out of its long-term downtrend. Leuthold also flagged that EPS estimate revisions have lost their upward momentum, a possible early sign of peak earnings - while pointing to a seasonal tailwind: since 1942, the S&P 500 has never posted a negative November–April return following midterm elections. Tactical accounts trimmed net equity exposure to 51%.
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