Election Cycles: Bulls go Boom! | SPX Market Analysis 5th Nov 2024

Ahoy there Trader! ‍‍⚓️

It’s Phil…

Well, today is the day we’ve all been waiting for: the U.S. presidential election. Will it be Trump or Harris? Personally, I don’t have a horse in this race since I’m a non-U.S. resident. But I’m keenly interested in how this impacts the markets!


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As we look back, the 30 days before election day typically show a bearish bias, with markets often meandering downwards. However, post-election day usually brings a wave of optimism, sending markets soaring for 3-6 months.

This trend is supported by lots of data, showing how uncertainty can lead to fear, which then flips to confidence when political clarity emerges.

  • I went flat last Friday.
  • Expecting to resume trading on Wednesday.
  • Anticipating a bullish trend through to the end of the year.

Charts by Seasonax


Fun Fact

Did you know that the stock market tends to perform better in the year after a presidential election? History shows that after an election, regardless of the winner, the market often rises!

This phenomenon is often attributed to the increased certainty that follows the election. Investors typically feel more confident about the economic landscape once a leader is chosen, leading to increased spending and investment. As a result, markets often experience a surge in activity. Studies have shown that in the year after elections, the S&P 500 averages gains of around 8-10%.


 

Happy trading,

Phil

Less Brain More Gain

…and may your trades be smoother than a cashmere codpiece

 


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