Is A Post-Election Euphoric Peak Just Around The Corner?

0:01 in this week's video we'll review the latest charts and data to help us answer the question is a postelection euphoric Peak just around the corner quote on the bottom of your screen is from yardeni research Donald Trump's win and the Republicans possible sweep of the house and the sweep of the Senate is consistent with our roaring 2020 scenario indeed it increases the odds that good times will continue through the end of the decade and possibly into the 20 30s which of course aligns with rather than contradicts the thesis that we're currently in a demographically induced secular bull market that could last until 2035 now the upper left quadrant of your

0:46 screen from Ryan Dietrich talks about the fact that the Fed rate cut this week was a rare event with the FED cutting near an all-time high in the S&P 500 they've done it 20 other times in a year later stocks were higher in every case Ryan's table over here average gain a year later 13.9% the median gain just a hair under 10% and again there were 20 historical cases 20 times the market was higher a year later something similar just happened on Thursday of this week and of course none of this predicts anything it just helps us better understand the probability of good things happening relative to the probability of bad things happening

1:33 allowing us to keep an open mind about better than expected outcomes looking out 1 to 10 years while keeping realistic expectations about how markets operate in the real world even if something like this happens there is an extremely high probability that between a point a and a point B that could be 10 years down the road there's going to be several events that are highly comfortable as we experience 100% normal and to be expected draw Downs here's one example of the numerous charts that we covered in last week's video that told us to keep an open mind about better than expected outcomes after the election from a leadership perspective it's good to keep in mind in

2:21 2016 the last time Trump was elected president RSP outperformed spy significantly for a short period of time after after the election we zoom in on these two periods 2016 and 2024 and in each case look at RSP the equal weight S&P 500 relative to spy the standard weight S&P 500 on a weekly chart and we're doing so two days after the election in 2016 and two trading days after the election in 2024 you can see the RSP spy ratio had been rising iing for quite some time heading into the election with a multi-month period of consolidation it's

3:06 not really what we've had over the exact same time frame this is January of 2016 this is January of 2024 you can see the ratio has moved from this point here earlier in 2024 down here that's a downward sloping line indicative of a downtrend 2016 it was an upward sloping line indicative of an uptrend in both cases we're speaking to the trend on an intermediate term multi-month time frame also noteworthy this is 2 days after the election in 2016 the chart is dated November 10th 2016 RSP went on to outperform for a few weeks after the election and then it had

3:52 a give back and after that quickly reverted to underperforming again in Q 1 of 2017 simply telling us not to overreact to movements and asset class behavior and Leadership over the next let's say 1 to 4 weeks this is the chart 2016 2 days after the election this is what the same chart looked like year end 2016 and this is what the same chart looked like on January 26 2018 why did we pick that date that's the day the S&P 500 Peak that was the end of the Trump rally that began on Election Day in 2016

4:38 and again ended in January of 2018 and then 2018 stocks experienced two draw downs and then a lower low in the second draw down in Q4 of 2018 charts on your screen are weekly charts with the 10-week moving average in Gold the 20 we in Black the 30 we in blue the 40 week in red the 50 week in green and the 200 week in pink and if we remove price it's a little easier to compare and contrast both of the charts two days after election day in 2016 and two days after election day in 2024 you can see this is a much weaker Trend here with these moving averages

5:23 well below a downward sloping 200 week in pink it's not really what we had here close closer to election day in 2016 now we're going to take several charts one example is the chart on your screen that we've used in previous videos charts that have been helpful allowing us to stay with the bullish Trend and then eventually we'll take the charts and update them and see what they look like in the present day chart on your screen dated December 13th 20203 it's almost a year ago covered this chart in one of our weekly videos it told us to keep keep an open mind about better than expected outcomes how does the same chart look today is it starting to deteriorate in a concerning manners similar to q1 of

6:11 2022 it is not the bullish breakout that we covered back here is still in place and we're still well Above This High here from 2021 top portion of your screen is the NASDAQ Composite tape index if you look at the upper right hand corner it's 2024 you can see the indicator crosses over the Ballinger band here in 2024 similar to 1991 1995 2009 and 2016 you can see we're crossing here in 2024 after Crossing below the center line on the Binger band remaining below it for quite some time and then recapturing it since most of us no

6:57 stocks performed well walking forward from 2009 and 2016 it might be helpful to look at the S&P 500 in isolation in 1991 and 1995 since the present day has a similar look so here's the chart that we just looked at a portion of that chart we get the cross here in 1991 you can see the S&P 500 performed extremely well between 1991 in the end of 1993 here's the second look here that's similar to 202 24 using the indicator from the previous chart the data from the previous chart this is 1995 this is the S&P 500 walking forward from January of 1995 both of the charts show the trends

7:44 with price removed and you can see they were strong Trends with gold the fastest moving average on top here in 1993 and pink the slowest moving average on the bottom there's a chart that we covered several weeks for the election on October 15 2024 we said the present day upper right hand corner of your screen 2024 looked a lot more like 2016 and a lot more like the bullish setup in 2013 relative to these concerning setups in 2008 2011 2015 2018 and 2020 how does the exact same chart look today is it morphing into one of these concerning looks

8:30 it is not if we zoom in using the same data on November 7th 2024 you can see we're trying to break out Above This High here from 2021 similar to this breakout here in 2013 and similar to this breakout here in 2016 and if you know your stock market history 2013 2014 into May of 2015 was a constructive period for equities the same can be said here from relatively early in 2016 to that January 26th Peak 2018 in the S&P 500 several weeks before the election the S&P 500 Advance decline volume line

9:17 weekly told us to keep an open mind about better than expected outcomes with 2024 looking similar to this constructive setup in late 2016 after the first Trump election successful election and similar to this breakout here in 2013 is the chart in the present day if we fast forward starting to take on a concerning look similar to q1 of 2022 here the answer is no chart on your screen this version of it is dated November 7th 2024 and we are holding that constructive breakout several weeks before the 2024 election we also use this chart dated October 16th of NASDAQ new highs minus

10:03 new lows to try to help us keep an open mind about better than expected outcomes this was a constructive different incremental changing look here in mid October and we still have a constructive look on November 7th 2024 if we go back to June of this year June 7th 2024 a date chart on your screen of bkln in the ETA F World leverage AKA risky loans we said the present day in June up here really didn't look anything like this concerning riskof period during the covid plunge or anything like this concerning riskof look here in early 2022 is this chart starting to deteriorate in the present day the

10:50 answer is no clients and longtime viewers know that we do cover Bitcoin from time to time because it can help must understand the Market's tolerance for risk this is Bitcoin relative to the US dollar this is a monthly chart with the 7-month moving average all the way out to the 52-month moving average in pink here moral the story when the monthly chart of Bitcoin broke out to new highs here in early 2016 finished this period of consolidation and broke out in 2020 good things happened in the S&P 5 00 for a long period of time in both cases the market continued to rally for approximately one year if we move to the

11:39 upper right hand corner of the screen you could call this somewhat of a cup and handle pattern which is a bullish pattern or you could say that this is a left shoulder this is the head and this is the right shoulder which would be potentially a constructive inverse Head and Shoulders pattern regardless this is a long-term period of consolidation and now we are trying to break out in a bullish Manner and we have a constructive profile with the moving average cluster as well you can make an argument that this look here looks similar to this look in here and similar to this look in here again several weeks before the US election we said don't go to sleep on the NASDAQ it looks like momentum is trying to turn up in a constructive

12:25 manner if we fast forward to 1253 p.m. eastern time on Friday November 8th you can see we do have a macd bull cross similar to this cross here this cross here and this cross down here in late 2022 during the session on Friday the NASDAQ Composite was up 5.68% for the week and breaking out of this multi-week period of consolidation down here again looking at the weekly chart during the session on Friday November 8th we have a constructive candle here trying to clear these levels here from a few months ago and constructive momentum profiles with Williams percent r on the weekly chart

13:11 macd and stochastic RSI all of this over here really doesn't look anything like these concerning momentum looks here in late 2021 into January of 2022 all of this consolidation in recent months is occurring above upward sloping 200 we moving average in red if we look at the daily chart of the NASDAQ top Center portion of your screen during the session on Friday November 8th now we've got the 8-day moving average out to the 50 day moving average in Gold we've been showing this chart on Twitter and in these weekly videos to say that things have incrementally been improving on the nasck for several weeks since we made this intraday low here I

13:57 believe on August fifth we still don't have full resolution here relative to leadership but this is an improving look with the NASDAQ outperforming the S&P 500 by 9/10 of a percent during Friday's session and you can see momentum down here with the Copic curve is trying to turn back up during the session on Friday we had price above all of the moving averages that's the 30 we the 40 we and the 50 we slopes of all the moving averages are up fastest moving average in blue is on top slowest moving average in green the 50 we moving average is on the bottom thus we are trying to reestablish a fullbore bullish look but there's still work to

14:43 do we would feel more comfortable about the NASDAQ resuming leadership if we could exceed this High here from July of 2024 just a quick heads up Shaco Capital does not have a WhatsApp account and we do not conduct any business on WhatsApp be careful of imposters and scammers if you do have a message that implies that Shaco Capital Management is recommending anything on the WhatsApp it would be great if you could tag that message and report it chart on your screen November 8th 1 p.m. eastern time we've shown this chart numerous times in recent weeks we've said all of this consolidation in here has been occurring Above This long-term period of consolidation in

15:30 here this looked healthy it still looks healthy we've got the 50-day moving average in Blue on top the 250-day moving average in silver on the bottom daily chart has a full bore bullish look and it's holding a wonderfully looking and constructive bullish breakout the longer a market goes sideways the bigger the move we can expect to get we either get a bullish breakout or bearish breakdown and of course in this case we have a bullish Breakout let's talk a little bit more about leadership this is the Dow Jones Industrial Average affectionally known as a dow relative to the NASDAQ Composite chart is as of 10:5 p.m. eastern time on Friday November 8th 2024 weekly Cloud for the ratio if

16:17 you're a dow bull these are the bullet points you want to avoid bearish odds increase when green is below price it is when price is below the cloud it is is when the cloud flips from green to Red well it's still red when price is below red in this case the ratio is below red and when blue is below red well blue just cross below red we're checking this box this box this box this box and this box telling us from a leadership perspective the Dow has some work to do to overtake the NASDAQ Composite and when the NASDAQ was consolidating in September of this year chart on your screen dated September 24th we use this chart to say yes this

17:04 looks weak in here from a momentum perspective but the trend still looks good looks like we're trying to make a stand here at an upward sloping 40 we moving average in red and momentum looked like it was trying to turn back up in September of this year similar to this turn here near the October low in 2023 also making a stand above an upward sloping 40we moving average in red how does the exact same chart look today better worse or about the same the answer is better we're Above This level here and better we do have a more constructive turn here in the true strength index several weeks before the election we said this chart is telling us to keep

17:52 an open mind about better than expected outcomes NYC composite monthly checking all of the the bullish boxes and looking similar to constructive periods in 1991 1995 2012 after the major low in 2020 and after a period of indecisiveness here from 2023 if we look at the same chart on November 8 2024 10 minutes after 1 we still have a very constructive look and we continue to check all of the longer term bullish boxes this is the monthly Cloud chart for the NC composite it October 17th 2024 just a few weeks before the election we use this chart to say try to remain patient here and keep

18:37 an open mind about better than expected outcomes because the present day here looks similar to 2003 2009 2016 good things happened in the S&P 500 following similar setups in this case we use the 20mon moving average in blue but you can see the same Concepts in the Pres present day if we switch over to the 50-month moving average on November 8th 2024 on September 24th just a few short weeks ago we said keep in mind all of this consolidation here is occurring above an upward sloping 30 we moving average in blue an upward sloping 40we moving average in red and an upward sloping 50 we moving average in green we

19:24 zoom in using the same moving averages we still have a constructive and strong Trend look the only difference is is this consolidation that we talked about back here in September is for the most part in the rear view mirror as of November 8th at 1:23 p.m. eastern time also noteworthy this is a strong Trend look for the broad S&P 1500 and even with this strong trending look if we compare that same index the NASDAQ Composite and put a 200 week moving average on it here you can see in 2024 on November 8th really haven't done anything yet to flip this longer term downtrend we are near the moving average

20:11 here so we have to keep an open mind probabilities would improve If the ratio could move into this area here during the session on Friday November 8th around 1:20 p.m. eastern time the S&P 1500 was underperforming the NASDAQ by 7 7% November 9th 2023 we said all of this consolidation here was occurring within the context of a very constructive setup here when we looked at the monthly chart of the S&P 500 this looked similar to this setup here in 2016 how does the exact same chart look today is it morphing into something more concerning like this look here in

20:56 2015 or this look here in q1 of 2022 it is not we still have a constructive long-term look on Friday November 8th at 1:26 p.m. eastern time in June of this year we said from an intermediate term perspective it was a good sign that momentum indicators on the weekly chart of the S&P 500 using Williams percent R stochastic RSI and full stochastic these looks really didn't look anything like these concerning looks here during the corrective period in 2023 chart on your screen again is dated June 7th 2024 or we starting to lose momentum similar to these concerning looks here from the summer of

21:43 2023 if you go to the far right portion of your screen lower half here the answer to that question is no this this and this really don't look anything like this concerning period in here during the correction in 2023 given what we know today it's quite possible that our number one job in the coming weeks and months will be to fight complacency make sure that we don't get overconfident when you look at things like the vix and you look at margin debt it appears given the strong trends that we have that the stock market most likely will continue to move to the upside from a trend perspective in the coming weeks and months but we don't

22:28 want to make any assumptions and even if really good things are going to happen for a long period of time it's extremely important that we have realistic expectations about how markets operate in the real world even in the context of a secular bull market the charts and Concepts covered in these weekly videos over the past year fortunately have been very helpful but we all know the only way that we can use them effectively going forward is we hand it in next week and every week with that flexible unbiased and open mind the material in this video has no regard to the specific investment objectives financial situation or

23:14 particular needs of any viewer this video is presented solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any Securities or any related financial instruments nor should any of its content be taken as investment advice any opinions expressed in this video are subject to change without notice and shako Capital Management LLC or CCM is not under any obligation to update or keep current the information contained herein CCM and its respective officers and Associates or clients may have an interest in the Securities or derivatives of any entities referred to in this material CCM accepts no liability whatsoever for any loss or damage of any kind arising out of the the use of all or any part of

24:00 this material we recommend that you consult with a licensed and qualified professional before making any investment decision