Tactical Ramp Ahead
Since 1950, the 4th quarter of an election year has historically been very strong for the S&P 500 (SPX). Of the past 15 elections, the 4th quarter of the election year was up 13 times. The only two negative occurrences were in the recessions of 2000 and 2008, so unless you believe we are in a recession with money availability shut down, it stands to history the SPX should see a meaningful advance through year end. Of the 13 that were positive the minimum gain was 1%, the average was 4.79%, and maximum advance was 8.73%, respectively.
In fact, one-third of the time the 4th quarter of an election year was up >8%. That would translate to a one-third chance of a 9% gain from current levels. The S&P 500 remains in a well defined intermediate-term uptrend, is in and is in the “Fundamental Sweet Spot” of the economic cycle.