Pattern to Predict Presidential Election: S&P500 SPY

When you see the pattern of price action going into the Presidential Election, you can see a pattern of massive selling. The "Range Expansion Declines" are highlighted in YELLOW TRIANGLES on the chart to show you when there are movements in the market DOWN by an amount GREATER THAN THE PREVIOUS MONTH'S RANGE.

What you can see here is that there is a major power shift that seems to happen and a period of "de-risking" when there are concerns that the leading party will shift power.

How can you use this to predict? If you see massive monthly "range expansion" moves down, there is a good chance the party in power will shift to the other party. You can see that Obama's 2nd term in 2012 looked like it would shift to Romney, but it didn't.

(This is a similar chart to the one I posted before the election where I pointed out that people had already sold and therefore was support. Being "trapped" means being either in cash or short for a market advance.

Cheers,

Tim

11:37AM EST Friday November 18, 2016