the US presidential elections will take place on November 3rd. There is a lot of speculation in stock market reports about the effects the election result will have on the financial markets. In the very short term, there may actually be a few price swings.
At most a few short-term capers
However, history shows that in the end it doesn’t matter which party is the US president or which party has the majority in Congress. You can read specific figures on this in the monthly edition of my stock market letter “Crisis-proof Investing” published on Monday evening, October 26th.
Bad for the stock markets
The fact that the elections are meaningless for the medium and long-term course of the stock markets is bad news for stock marketers who are betting on further rising prices. The American world leading index S&P 500 shows all signs of an important top formation. Momentum, sentiment, fundamental valuation and chart technique together result in a picture that signals a downward trend reversal that has just taken place. Neither the old nor the new US president can change that.
S&P 500, Momentum Oscillator, 2019 to 2020
The S&P 500 shows a very worrying top formation, which is gaining in importance due to the negative divergence of the price-momentum oscillator (blue arrows). Source: StockCharts.com
And the fundamental overvaluation that the S&P 500 and even more the NASDAQ 100 has achieved in the past few months dwarfs everything that has existed before. This means that the records of 1929 and 2000 were even exceeded. That’s why I expect at least a third of the S&P 500 in the bear market that follows – regardless of who rules the White House.
Good for gold and select mining stocks
In contrast to the stock markets, the precious metals sector is in the early phase of a long-term bull market. There are no signs of top formation or overvaluation here. Rather, the opposite is true. I set this out in detail in the October issue of Crisis-Safe Investing using a variety of proven indicators.
So there is no reason to doubt that the gold bull market will continue. And my price range indicator, which also pointed to the correction that began in August, is now on the verge of an important buy signal.
Take advantage of the great opportunities that it heralds in select gold and silver mining stocks. You can find out which mining stocks I recommend you buy now in my stock market letter Crisis-proof investing – 30 days free now.
I wish you a nice weekend,
Claus Vogt, editor-in-chief of crisis-proof investing
P.S .: Read the November issue also what is emerging in the oil sector and in Japan.
P.P.S .: If you want to get through this crisis week after week, please request the free Claus Vogt market commentary here today easily with your email at.
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