In this report, we focus on a special situation: a trading opportunity triggered by the midterm elections and large numbers of senators and congressmen running for re-election during the midpoint of Obama’s first term.
Focusing on the economy and the world of business during the second year of a Presidential term is nothing new. It’s been going on for more than 75 years and for 19 Presidential terms. This is evidenced by the fact that the S&P 500 Index has never had a declining year from October of the second year through December of the third year of each Presidential term. Again keep in mind that past results are not necessarily indicative of future performance.
If you’re a stock investor, the best way to use this data is to have a bullish bias during the 15- month period beginning October 1st 2010. It doesn’t mean that you should close your eyes and buy, it simply means that you should be active and that you should look for opportunities to own stock.
If you’re a trader in the Forex currency markets, as we are, you should look for opportunities to benefit from a falling Dollar. One of our favorite Forex markets is the EURUSD. Starting in October 2010, most (if not all) of our positions in this market will be bullish. In other words, we’ll be looking for opportunities to buy the dips.