Technical strategist Paul Ciana from BofA Securities noted that while the S&P 500 remains in a solid uptrend as the year draws to a close, deteriorating market breadth and historical parallels suggest the index could still face a potential 10% pullback. In a November 14 report, Ciana highlighted that the index continues to trade within its upward channel, finding support near the 50-day moving average (currently around 6,700). If this support holds, favorable seasonal tailwinds from November to December could propel the S&P 500 to 7,040 (+3%) or 7,115 (+4%). A repeat of 1980’s exceptionally strong year-end pattern might even push gains to ~6.5%, nearing 7,280.

Ciana maintained a bullish stance after the bank’s summer target of 6,625 was achieved, recommending profit hedging at new highs. Recent volatility in October and early November reinforced tactical hedging value until broader participation emerges. However, warning signs persist: despite the S&P 500’s record highs, key breadth metrics have weakened—more stocks hit 52-week lows, while fewer trade above major moving averages. The strategist warned that narrowing momentum raises downside risks, with a breach of the 50-day MA potentially deepening the correction. Critical support levels lie at 6,631, 6,570–6,551, 6,360, and 6,200.

**Seasonals Favor Gains, But Sector Rotation Needed** Year-end seasonality has historically been strong. In "Year 1" of the presidential cycle (e.g., 2025), when the index is up through October, November-December gains occur 92% of the time, averaging nearly 5%. However, Ciana stressed this pattern requires leadership rotation into typically year-end outperformers—consumer discretionary, healthcare, industrials, and materials (all seasonally strong in November)—to broaden participation. In contrast, tech historically lags in December, rising just 54% of the time.

While the S&P 500’s uptrend remains intact, Ciana cautioned that narrow participation and historical analogs keep downside risks alive. Improved breadth and diversified leadership could amplify seasonal tailwinds. A break below the 50-day MA would signal a likely correction from Q4 2025 into Q1 2026.