Signal & Noise: Weekly Signal Report, August 18th 2026

It's time to start paying attention to the Presidential election cycle again.

Issue No. 13 · Tuesday · August 18, 2026

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What’s Inside:

1. At a Glance - A “weight of the evidence” look at the current market environment, as well as my Regime map.

2. The Call - A deeper dive into what I am seeing.

3. Under the Hood - Current market internals, sector breadth, and intermarket analysis.

4. Sector Watch - Which sectors pass/fail the screening process.

5. Current Screen - Which stocks pass the screening process.

6. What I Am Watching - Stocks I am watching that are approaching a passing grade in the screening process. Plus, what changed from last week.

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At a Glance

Market regime: Risk On

The Call

We are a little more than 50 trading days away from the US midterm elections. Historically, the market enters a bit of a lull as investors take a wait-and-see approach.

However, take note of the chart above. The periods when one party controls both the House and the Senate and loses one, like now (according to current political trends and predictions), tend to hold up better vs other years.

The really important part of the chart is what happens after the election. The 4th quarter of the year tends to see a strong performance from the stock market.

This strength continues into the following year, with “year 3” of the Presidential election cycle, which, since 1950, has been the strongest of the 4 year cycle.

Because of this cycle, I wouldn’t be surprised to see some consolidation and rebalancing of portfolios over the next few weeks, as investors start to position their portfolios for the 4th quarter and next year.

Under The Hood