The Election Cycle: What to Expect in Stocks and Bond Prices
Keep in mind volatility is higher, which meaning risk per trade is higher. In the long run you stand a much higher chance of making money trading with the trend than trying countertrend trades (picking a top).
So, as you can see below, it looks like the stock market will be trying to put in the bottom over the next week or two, which falls in line with our election cycle. It is very important to know that during intermediate cycle lows is where some of the biggest drops take place.
These sharp drops are what is needed to cleanse the market one last time, to shake as many traders with tight stops out of the market before it reverses and starts the next rally. I would like to see a one- to three-day market selloff as that would be the signature bottoming pattern I like to buy.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts