What past US presidential elections tell us about future trends in S&P 500 [Video]
|With the U.S. election just around the corner, traders and investors are examining historical market patterns to anticipate potential moves. By analyzing past market structures, particularly from the 2016 and 2020 elections, we might glean some valuable insights into what could happen next. Here’s a quick breakdown:
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Accumulation and reaccumulation patterns: Historical data from previous election years, like 2016 and 2020, shows accumulation structures where the market builds up momentum, often followed by an uptrend. In 2020, there was a clear breakout and retest, leading to a strong rally.
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Pre-election volatility: One week before both the 2016 and 2020 elections, volatility and trading volume spiked. This increase could be a reaction to uncertainty around the election, creating opportunities for sharp market moves.
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Post-election reactions: After election day, the market often enters a new phase. For both 2016 and 2020, we saw significant bullish movements post-election, with trends lasting nearly a year before another major shift.
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Current structure: The present market setup is showing similar characteristics, such as a "sign of strength" rally and decreasing supply. This structure could hint at another upward trend following the election.
Watch the video below to find out the detailed analysis of the analogue comparison from the election years in 2016 and 2020.
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