Oct 14, 2026 · 43 min
Hirsch sees seasonal volatility inside an enduring AI advance
Inflation And The AI Supercycle
The episode weighs historical cycles and technical signals against market concentration as investors assess whether AI’s advance can continue.
- 1Political and seasonal cycles point to midterm-year volatility, October weakness, and a possible late-month rally.
- 2Hirsch uses MACD settings, buy limits, and sector seasonality to distinguish market signals from short-term noise.
- 3Technology, semiconductors, telecommunications, and AI infrastructure remain central even as concentration raises rotation concerns.
Don't miss
Hirsch explains why he is more concerned about exiting the AI-driven advance too early than missing it, despite concentration worries.
The brief
Jeffrey A. Hirsch, editor-in-chief of the Stock Trader’s Almanac, brings a family tradition of market-cycle research to an AI-driven advance shaped by inflation, politics, and technological change.
Hirsch expects midterm-year volatility and a potentially weak October before a late-month rally, using seasonal patterns as signals when markets diverge from historical behavior.
The conversation gets practical with MACD: Hirsch favors an 8-17-9 setting for buy confirmation and the standard 12-26-9 configuration for sell-side analysis.
Market concentration in large technology companies raises a warning, but Hirsch sees rotation and comparisons with earlier technological revolutions as reasons not to exit too soon.
The discussion broadens from semiconductors and technology to telecommunications, satellite connectivity, and AI infrastructure, then previews a new basket of under-followed AI stocks.
What was said on this episode
33 statements · 28 positive · 1 negative · 4 neutral
Superboom cycles produce 500%+ market moves after war and inflation, enabled by transformative technology.
“the big cycle, the super boom cycle that my father discovered back in 76 for these 500% market moves, 500% plus market moves following war and inflation and built on enabling technology”
Listen at 2:40
The current long-term market projection is built on inflation, stock tokenization, AI, and quantum computing.
“this is built on inflation tokenization to stocks ai quantum computing all this stuff what's going on here”
Listen at 3:44
October has historically been the best month to buy stocks and the best midterm month.
“October has been the best month to buy stocks. It's the best midterm month.”
Listen at 4:49
The current technological boom is unprecedented relative to prior technological advances.
“But this technological boom is like nothing ever before.”
Listen at 6:31
AI combines the impact of multiple foundational technologies into one technological wave.
“This is fire, the wheel, indoor plumbing, you know, air conditioning, the internal combustion engine, the microprocessor, the internet itself, everything all wrapped in one stacked on top of each other.”
Listen at 7:32
The AI-driven technological boom will affect the entire planet and individuals unprecedentedly.
“So this is going to impact the entire planet collectively and each and every one of us individually like nothing before.”
Listen at 8:17
Persistent inflation raises asset prices.
“inflation continues to happen. It's not going to stop. And, you know, it inflates asset prices.”
Listen at 9:01
The Nasdaq is projected to reach 74,000 by 2036.
“Now, with NASDAQ 74,000, from the close of 2025 to 74,000 in 2036 that you see in this chart here”
Listen at 9:59
The Nasdaq has averaged a 13.7% annual return since 1971.
“NASDAQ has averaged 13.7% annual return since 1971.”
Listen at 10:12
Republican-controlled Congresses have historically produced better market performance than Democratic-controlled Congresses.
“Republican Congresses are better for the market than Democratic Congresses, excuse me, by a significant amount there.”
Listen at 11:15
Democratic presidents have historically produced better market performance than Republican presidents.
“Democratic presidents have been historically better for the market than Republican presidents.”
Listen at 11:23
A Democratic president with a Republican Congress has historically been the best market combination.
“The best combination being a Democratic president and a Republican Congress”
Listen at 11:29
The midterm-year fourth quarter through pre-election-year second quarter typically gains 20%–30%.
“Q4, the midterm year, through Q2, the pre-election year, is this 20% to 30% gain, you know, 29.4% NASDAQ.”
Listen at 12:49
The pre-election year and the fourth-quarter sweet spot remain favorable for markets.
“The pre-election year is still great. The fourth quarter and the sweet spot are still great.”
Listen at 13:56
The Russell 2000 is exhibiting textbook seasonal behavior.
“it's textbook seasonal behavior for the Russell 2000.”
Listen at 15:33
The market is unlikely to experience the same kind of Fed-driven sell-off as before.
“I don't suspect we're going to have that same kind of, you know, Fed-driven sell-off.”
Listen at 19:20
Late October is the best time to buy stocks, especially technology and small-cap stocks.
“So to me, it's buying opportunity. Best time to buy stocks. In the Almanac, if you look, even in the copy you have in the calendar pages, it said late October is the best time to buy stocks, especially tech and small caps.”
Listen at 19:41
Markets that resist seasonal weakness tend to rise after the negative period ends.
“when it doesn't go down when it's a usually negative period, there's some more powerful forces at play. And when that period's over, it tends to take off.”
Listen at 20:48
More powerful forces are keeping the market elevated despite negative conditions.
“all we know is that something more powerful is going on. It's keeping this market up through all this negativity.”
Listen at 21:55
Markets tend to turn upward after mid-October weakness, especially in midterm years.
“we tend to see a turn after that point, especially this is the midterm years.”
Listen at 23:31
October volatility is setting up another late-month market surge.
“It's just uncanny setting up for this, you know, October volatility setting up this late month surge. It's happening again.”
Listen at 23:41
The 12-26-9 MACD setting is used for seasonal sell signals.
“We use the 1226 on the sell side when we get into the seasonal sell signal”
Listen at 24:53
MACD should be combined with other analyses rather than used alone.
“MACD is to be used in conjunction with other analyses. It's not like in a vacuum. You just buy it.”
Listen at 26:01
The 8-17-9 MACD confirms buy signals, while 12-26-9 confirms sell signals.
“we use 879 to confirm uh buy signals for the best six months and then the 12 26 9 for sell signals”
Listen at 26:46
Semiconductors experienced expected seasonal weakness and are currently favored.
“The semiconductor sell-off this summer was right in line with the seasonal short. Semis are one of the ones we like right now.”
Listen at 30:59
Hirsch is buying XLK and may buy more after its decline.
“I picked up some of the XLK the other day. I probably will get some more of that because it's down a little bit.”
Listen at 32:32
AI can drive growth in biotech through drug development, clinical trials, and medical records.
“things like biotech take off as AI becomes impactful on on new drug development and clinical trials and, you know, medical records and all that stuff.”
Listen at 35:45
The AI boom offers opportunities, and the biggest risk is exiting too early.
“This is different. This is a new world. As we showed on my big... You know, AI boom chart, it's there's going to be ups and downs, but there's some opportunities here. I think the biggest risk is getting out too early and missing out.”
Listen at 36:59
Betting against Elon Musk has historically performed poorly over the long term.
“Nobody has really done well betting against Elon Musk for the long term.”
Listen at 38:19
Weakness in SpaceX-related investments presents a buying opportunity.
“But, you know, any weakness is an opportunity.”
Listen at 38:51
AI stock selections should generally have revenue and earnings.
“we want companies that have revenue and have earnings”
Listen at 40:52
Preferred AI companies show accelerating growth, attractive valuations, financial quality, and limited analyst coverage.
“we're looking for companies that are exhibiting an acceleration of growth in revenue and earnings, have good valuations, low price to sales, low PEs, you know, good, you know, debt to equity ratios and margins, but also are under followed.”
Listen at 41:00
Cybersecurity, energy, and infrastructure will be needed to build and operate the AI-driven data world.
“we're going to be digging a little bit deeper into some themes that are AI related, you know, cybersecurity, energy, you know, infrastructure, things that are going to take to build and run this new data driven world.”
Listen at 41:46
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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