A CRE banking crisis is coming. (See here.) Could this cause a market pull back???
I am trying to figure out how this election year will play out compared to other election years. The blue line on the top chart shows the average movement of the market for all election years between 1956 and 2020. This chart shows that we normally get a Q1 rally (3mths), followed by a consolidation period of 4mths, followed by a pre-election rally (1-2mth) and then a consolidation period of 1-2mth. Given that the Q1 rally has been a bit longer this year (and is unsustainable), the red line shows the most likely path of the market toward the election target (assuming there is no- black swan event).
The bottom chart is the DAX weekly. It shows that it has reached a short term trend resistance line and could go back to the support line - which is consistent with typical election year market behaviour.
So, now may not be the best time to be entering the market.
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A CRE banking crisis is coming. (See here.) Could this cause a...
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