The Surprising Market Upside of Politics

As we all know, 2022 was a terrible year in the markets... The benchmark S&P 500 Index lost more than 19%. And the tech-heavy Nasdaq Composite Index fell around 33%. [Chaikin PowerFeed]( The Surprising Market Upside of Politics By Marc Chaikin, founder, Chaikin Analytics As we all know, 2022 was a terrible year in the markets... The benchmark S&P 500 Index lost more than 19%. And the tech-heavy Nasdaq Composite Index fell around 33%. Neither index had performed that poorly since 2008. But importantly... we're now in the early days of an incredibly "bullish" setup. You see, something happened last year for only the ninth time since 1950. And every other time it occurred, stocks surged anywhere from nearly 11% to more than 34% throughout the next year. When you combine this data with [the "breadth thrust" indicator I detailed yesterday]( it's clear that we're on the cusp of a major opportunity. And it's pointing to 20%-plus upside in stocks this year. Let me explain... Recommended Links: [I've Stayed Quiet for Nearly Two Years... but I HAD to Step Forward Now.]( Following his stunningly accurate "Melt Up" prediction, investing legend Dr. Steve Sjuggerud breaks his silence with news that could deliver multiple 1,000%-plus winners... or cripple your wealth for decades to come. Don't miss this incredible new update. [Click here for details](. [GET OUT OF CASH IMMEDIATELY]( One year ago, one of our corporate affiliates predicted a market crash. People laughed at them. But beginning the day afterward, we saw the worst sell-off in half a century, and you could have doubled your money six times with their recommendations. [See their NEWEST prediction in full - for 2023](. In short, 2022 was just the ninth "down" midterm-election year for the S&P 500 since 1950. And in each of the previous eight instances, stocks soared the following year. It sounds like some kind of joke. But it's not... The midterm cycle is one of the most predictable in the markets. And now, we're on the bullish side of this cycle. You can see what I mean in the following table. Take a look... [Chaikin PowerFeed] In the previous eight occurrences, the average return in the year after the midterm elections was nearly 25%. That's roughly four times the expected return from the stock market in a given year. You'll also notice something else important. Stocks went up at least 10% every time. So while I may loathe the game of politics in general, the numbers are clear... Passing the midterms is a major market milestone. And a positive shift is playing out in the macroeconomic data, too. The official inflation numbers continue to improve... The Consumer Price Index ("CPI") appears to have peaked at 9.1% last June. It came in at 6.5% in December. So as long as the current downtrend doesn't reverse, the CPI could drop below the Federal Reserve's benchmark rate (4.25% to 4.5%) as soon as this quarter. That could encourage the Fed to keep slowing (or even to pause) its interest-rate hikes. Now, we're only in the early stages of this shift. And that means it's hard to figure out how high the next bull market could go. But we can use three historical metrics as guidelines... The average rally from a midterm-election-year low has been 30%. The S&P 500 hit an intraday low of 3,491 in mid-October. So that would put the target range this time at around 4,540 – or about 13% gain from its current level. The average rally when the midterm-election year finished down has been nearly 25%. And the S&P 500 closed last year at about 3,840. So that would put the target range this time at around 4,800 – or about 19% higher than its current level. And finally, the average rally after a breadth-thrust signal has been 25%. With that signal occurring recently around 4,000 on the S&P 500, it would put the target range at about 5,000. Remember, the S&P 500's all-time high was just shy of 4,800 on the first trading day of 2022. So if all the conditions align perfectly... the S&P 500 could make a new all-time high. Folks, our takeaway from yesterday and today is simple... Last year was terrible in the markets. But we're not living in the past. And moving forward, the numbers tell us that this year's market offers a lot of bullish potential. As always, we'll keep an eye out for the most attractive opportunities as the market turns. And with the Power Gauge at our side, we're sure to uncover the best stocks to own. Good investing, Marc Chaikin P.S. I want to make sure as many folks as possible can profit as stocks turn higher. So I just put together a special offer for Chaikin PowerFeed readers... Right now, you can get instant access to our Power Pulse system and a risk-free, 30-day trial of my Power Gauge Report at 75% off the normal price. These two tools can help you uncover the most attractive opportunities in any market... For example, I just shared all the details with my subscribers about a stock that our system ranks as "very bullish." It's beating the market by a wide margin over the past two months. And it's perfectly positioned to climb another 50% in a short span. [Click here for the details](. Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +0.25% 11 17 2 S&P 500 -0.13% 143 284 73 Nasdaq -0.20% 35 49 17 Small Caps -0.25% 559 1007 325 Bonds +1.44% — According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are Bullish.. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Communication +3.90% Information Technology +2.43% Discretionary +0.85% Materials +0.18% Energy +0.16% Real Estate -0.23% Financial -0.31% Industrials -0.85% Health Care -0.99% Staples -2.19% Utilities -2.32% * * * * Industry Focus Health Care Equipment Services 18 48 11 Over the past 6 months, the Health Care Equipment subsector (XHE) has outperformed the S&P 500 by +5.42%. Its Power Bar ratio, which measures future potential, is Strong, with more Bullish than Bearish stocks. It is currently ranked #13 of 21 subsectors. Top Stocks [rating] HOLX Hologic, Inc. [rating] INSP Inspire Medical Syst [rating] UFPT UFP Technologies, In * * * * Top Movers Gainers [rating] PCAR +8.64% [rating] TRV +3.70% [rating] RTX +3.34% [rating] MNST +2.91% [rating] TAP +2.76% Losers [rating] MMM -6.21% [rating] CTLT -5.74% [rating] BRO -5.24% [rating] EPAM -4.80% [rating] HCA -4.22% * * * * Earnings Report Reporting Today Rating Before Open After Close ABT, MKTX, TEL, USB URI, CSX, TXT, LRCX, TER, AMP, RJF, STLD ADP, ELV, HES, KMB, NDAQ, NEE, NSC, T, TDY NOW, STX, LVS, GD, EW, BA CCI, TSLA, PKG No earnings reporting today. Earnings Surprises [rating] GE General Electric Company Q4 $0.35 Missed by $-0.14 [rating] COF Capital One Financial Corporation Q4 $2.82 Missed by $-1.04 [rating] DHI D.R. Horton, Inc. Q1 $2.76 Beat by $0.52 [rating] PCAR PACCAR Inc Q4 $2.64 Beat by $0.44 [rating] DHR Danaher Corporation Q4 $2.87 Beat by $0.32 * * * * You have received this e-mail as part of your subscription to PowerFeed. 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