The Best Buying Opportunity Since March?

Presidential elections cause anxiety among traders and investors and there’s reason to be concern because whoever is the US president can have effect on the long-term economy and the stock market.  Near term- over the next  two to three months its doubtful whoever is elected US President in 2020 will be able to change the near – term direction of the US stock market.

Stocks discount the future by roughly two to three months.  Therefore, if you pay attention to the signals from the Stock market you have a good chance of profiting from the near-term direction.

Evidence of the near-term direction of the US stock market currently comes from the dimensions of time and momentum. 

Time: November is statistically the most bullish month of the year, and when it is bullish – rallies last at least until late December.  During the seasonally bearish period late August to mid – October the S&P 500 (SPX) in September declined only 8% and bottomed on September 24th.   The bears tried for more than a month and failed to break that bottom.  A lot of energy expended and no downward progress.

Momentum: The daily Stochastic on 11/02/20 had a bullish crossover in the oversold territory, this type of signal usually forecasts rallies lasting several weeks.

The evidence implies at the very least the SPX could reach it’s all-time, and if it can break the high it opens the door for a move to 3800.00

Recommendation for both traders and investors – buy SPX related non leverage funds on the open of the SPX session 9:30 AM – ET – 11/03/20.

Use a move below SPX 3233.90 as a stop loss for half the position.

Use a move below SPX 3110.00 as a stop loss for the other half of the position.

Investors, the time frame to take partial profits on this trade is about six weeks.  If you are not comfortable with this time frame – don’t take the trade.  If you are comfortable, keep the amount purchased small. 

Updates on the SPX will be coming later this week.  

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

2 thoughts on “The Best Buying Opportunity Since March?

  1. Thanks for this valuable tip on SPX, Mark. I count you as among the stock market experts. You possess more technical knowledge than many of these so-called high-profile advisors like Cramer.

    Like

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