2025 has been the year of broken playbooks.
January underdelivered.
The “summer lull” never showed up.
September — historically the graveyard for equities — turned into one of the strongest months in years.
Consensus keeps leaning on history. This market keeps ripping those pages up.
Now October is here. And I think the script flips again: a mid-to-late month pullback, followed by one of the strongest year-end rallies in recent memory.
Why I’m Leaning Bearish (Near-Term)
Technical Overstretch
Major indices are pressing into overbought territory.
Breadth thrusts that powered September are now fading.
Advance/decline lines suggest momentum is stalling.
Macro Calendar
Mid-October CPI + earnings season = catalysts for volatility.
Q3 comps are tough — expect some disappointments in cyclical sectors.
Fed minutes could reintroduce “higher for longer” fear, even with a pivot on deck.
Rates at a Crossroads
$TLT caught a bid in September, but yields remain choppy.
A short-term back-up in rates could be the excuse for equities to cool.
Sentiment Has Flipped
Fear & Greed Index has swung from “Extreme Fear” to “Greed” in less than 30 days.
Retail has piled back into tech and crypto.
When sentiment flips that quickly, markets usually reset before the next leg higher.
Why I’m Still Bullish (Big Picture)
Fed Pivot Playbook
Historically, the 3–6 months after the first Fed cut are strong for risk assets. Liquidity is coming.Seasonality Still Matters (Just Shifted)
Yes, September ripped. But Q4 is still historically the strongest window.
Pullbacks in October have historically been buying opportunities — most resolve higher into year-end.Positioning Reset = Fuel
An October shakeout would flush weak hands, reset overbought conditions, and give institutions a cleaner runway for a Santa Claus rally.
The Setup I’m Watching
October Pullback Levels
I’m looking for a 3–5% retrace off September’s highs.
Enough to reset stretched momentum and sentiment, not enough to break trend.
Santa Claus Rally Targets
After that reset, I expect the market to push through September highs and finish the year strong.
A classic Santa Claus rally — powered by dovish Fed expectations, liquidity flows, and a positioning reset.
Asymmetric Opportunities
High Beta Tech ($LMND, $SOFI, $OSCR, $HIMS): prime for a Q4 melt-up once conditions reset.
Defense Tech ($ONDS): still one of my highest conviction names — geopolitical + AI = asymmetric flows.
China Rebound ($BABA, $JD, $BIDU): oversold, contrarian, and poised if sentiment shifts.
Rates Hedge ($TLT): still attractive into a Fed pivot, despite near-term volatility.
Playbook
Trim into October strength — lock in wins from September.
Stay patient mid-month as CPI/earnings play out.
Scale back in late October if we see the 3–5% reset.
Position for a Santa Claus rally to close out 2025.
2025 has rewarded those who step in when history says “stay out.”
October looks no different.
Disclaimer: Nothing here is financial advice. Just my playbook as I position for what I believe comes next.
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