Just saw something interesting on Kalshi - traders are pricing in a 58% chance of an S&P 500 correction this year, which would put the index around 6,200 or lower. That's at least an 11% drop from the recent highs. What caught my eye though is that history suggests the actual odds could be way higher. Midterm election years are typically rough for stocks. Looking back at the data, the S&P 500 has averaged a 19% intra-year drawdown during these years, and when a new president is in office like now, that median drop jumps to 21%. So basically there's roughly a 50% shot of seeing a bear market at some point in 2026, but the prediction market is only showing 39% odds for a 20% decline. Seems like traders might be underestimating the dropping odds of a real selloff. The good news? Markets usually bounce back pretty hard after midterm elections - historically the six months following November have been the strongest period of the whole cycle. But here's the thing keeping me cautious: Wall Street is expecting 15% earnings growth this year, which would be the best in five years, but valuations are already stretched at 21.5x forward earnings compared to the five-year average of 20x. If companies miss those lofty expectations, there's not much room for stocks to hide. The prediction market data and historical patterns are both flashing caution signs, so I'm being selective about new positions and keeping more cash on the sidelines than usual.