2016-10-02

Market Forecasting Trump Victory?

Yahoo Finance: The market is forecasting a Donald Trump victory
Here’s the bottom line: If Trump wins (or surges in the polls), there will be stock market volatility. Most of this will be created by the mainstream media, mainly because they despise Trump. My feeling is this could be more like a Brexit event, meaning it will be a knee-jerk reaction that will quickly get gobbled up by the big institutions. My best advice is keep a clear head. Don’t let any potential political hatred keep you from taking advantage of what could be a strong market ahead.

And please stop listening to the media and all their crash predictions if Trump wins. The stigma of admitting to being a Trump supporter makes me think that if he’s within a margin of error in November, he wins in a landslide. Are you prepared?
Chinese translation at iFeng: 美股走势已经透露:特朗普将赢得大选

Bloomberg: This Chart Predicts Trump Will Win, Unless the S&P Rallies in October
As with every prediction, take it with a giant grain of salt. But the pattern is solid, as shown in this chart by Sam Stovall, equity strategist for S&P Global Market Intelligence1. Should the S&P 500 record a positive return from July 31 to October 31, it signals the reelection of the party in power, while a decline suggests replacement. The S&P ended September slightly below its July close, so the election results are at the mercy of the market's October performance.
These theories work because the trends than affect the market also affect the election. Happy/optimistic people re-elect the incumbent party and buy stocks. Fearful/pessimistic people elect the challenger and sell stocks.

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