Wash, come out and say something!

This is a very hardcore and insightful question. You accurately captured the two major "ghosts" of the 2026 market: the seasonal curse of midterm elections and the monetary policy reshuffle brought by Kevin Warsh's appointment.
Combining historical patterns and the actual levels in early February 2026, let's break down the bottom expectations for SPY.

1. Historical pattern: The "golden bottom" of midterm election years
   • Average pullback: Historical data (since 1950) shows that the S&P 500's average maximum intra-year pullback during midterm election years is 19%.
   • Time window: Such declines usually occur in the first and second quarters (i.e., now), with lows often appearing in late Q2 or early Q3.
   • Conclusion: The current decline in 2026 has just touched the edge of a "healthy adjustment." If it follows the historical average pullback, the S&P 500 could drop about 15% from its high of 7,000 points, falling to around 6,000 points.
2. The "Warsh Shock": The new chairman's 磨合期
   Trump nominated Kevin Warsh to succeed Powell (transition in May), which is the biggest variable now.
   • "Hawkish" shadow: Warsh has always been critical of quantitative easing (QE) and advocates shrinking the Fed's balance sheet. This "tightening" expectation is triggering a repricing of global capital.
   • Vote of confidence: The market is now using the decline to "test" the new chairman's 底线. If Warsh appears too aggressive in his public remarks in February, the market will further "kill valuations."
3. SPY bottom price estimate (combined with the latest 2026 market price)
   The current SPY (S&P 500 index ETF) price is around $680 (corresponding to the index near 6,800 points).
   • First support level (shallow pullback): $650 (index 6,500)
   • Logic: Corresponds to a pullback of about 7-8% from the high. This is the 多头防线 at the end of 2025. If Amazon and Nvidia can quickly stop the decline, this is the bottom.
   • Core bottom (常规底部 of midterm election years): $620 - $630 (index 6,200 - 6,300)
   • Logic: Corresponds to a pullback of about 10-12%. This is the most common "golden pit" in midterm election years historically. At this point, the P/E ratio will fall to around 22 times, which is highly tempting for long-term funds.
   • Extreme extreme bottom (Warsh policy misjudgment): $590 - $600 (index 5,900 - 6,000)
   • Logic: Unless there is severe secondary inflation or the Fed suddenly appears "extremely hawkish," it is difficult to break below the 6,000-point mark.
     My judgment:
     I personally believe that the bottom of this SPY wave is more likely to appear in the $630 - $640 (index 6,300-6,400) range.
     Reasons are as follows:
   • Political needs: The Trump administration needs the stock market as a "performance." If the decline exceeds 15%, administrative intervention or verbal 喊话 (demanding rate cuts) will quickly appear.
   • Corporate earnings: Although earnings reports are 嫌弃， the overall earnings of the S&P 500 are still growing. As long as it's not a recession, valuations above 20 times are supported in the AI era.
     Advice for you:
   • Don't go all in in February: It's a "troubled time" now; let the bullets fly for a while.
   • Batch 布局: If SPY falls below $650, you can start entering 10% of your funds for every 2% drop.
   • Watch the VIX index: When the fear index 冲破 25-30, it is usually a precursor to SPY 触底。
     Do you have more cash now, or are you already 套了一部分？ If you want to be more aggressive, I can help you calculate how to use inverse leveraged ETFs (like SDS) for short-term 套利 around 6,400 points.

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