The expected autumn weakness is in progress. The question remains as to when the markets will rebound. The October 12-13 time period is a projected turning point, likely a low. October 27th has been the annual low in any year. And, the last week in this month brings a low in the composite cycle composed of the one-, four-, and ten-year cycles. The DJIA has tended to rally in Q4 even in pre-election year and in years ending in three. So, we face one to three more weeks of decline.
These observations apply to a ‘normal’ market. This may not hold if this is the beginning of a 1970s-style bear market. There are certainly many similarities such as increasing rates, high commodity prices, and similar politics. There is one other cycle that supports the former and more bullish view. That is the reliable tendency for the market to rally for 15 months after the mid-term elections. This effect would carry the indices through to the end of this year.
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