You can't help but believe it! The U.S. stock market tends to decline before the midterm elections, so what happens after the midterm elections?
┈➤ The stock market is very likely to fall before the midterm elections
Looking at the past 30 years of history, including 8 midterm elections this year, only before the 2014 midterm elections did the U.S. stock market not decline, but the Nasdaq 100 still had a sharp dip in October.
You can see that although the overall trend of the U.S. stock market in the past 30 years is upward, major drops or significant corrections are more likely to occur around the midterm elections.
So, is the current decline in the U.S. stock market due to the midterm elections? Or is it the bursting of the AI bubble?
┈➤ What about after the midterm elections?
In 1998, when the majority party in both houses remained unchanged, the U.S. stock market took off directly.
In 2006, when the majority party in both houses changed simultaneously, the market fluctuated sideways for 4 to 5 months (during which the S&P first rose moderately) before going up.
In the other 5 instances, one majority party remained unchanged while the other changed. Except for 2010, the U.S. stock market generally adjusted for two to three months after the midterm elections and then rose.
┈➤ What about this year?
But it is basically certain that the Republican Party will at least lose the House of Representatives, so the U.S. stock market is unlikely to start rising immediately after the midterm elections.
Overall, Feng Brother believes that starting from Q2 next year, things will gradually improve with more certainty, but not necessarily before then.
The pessimistic scenario is another two months of decline; the optimistic scenario is consolidation.
As for crypto, don't try to force it. As long as there is no major liquidity black swan event, BTC will fall but will not experience an especially exaggerated drop.
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