Why Wall Street Is Watching October So Closely This Year

Listen to the audio version of this article (generated by AI).

Editor’s Note: Every election season, the financial media obsesses over one question: who will win? Louis Navellier and Marc Chaikin are asking a different one: when does the money start moving?

Their answer, based on market data going back to 1925, is “before the votes are counted.” A pattern with a 92% historical precedent tends to get underway ahead of Election Day – which means investors waiting for the political result may be reacting to a move that has already started.

He and Marc go deeper – with four free stock calls: two to buy and two to avoid – at their Midterm Mayhem event on Sept. 29. If you like what you hear, I encourage you to reserve your free spot for that event now.

Here’s Louis with more details…

It was the fall of 1980.

For nearly a year, Americans had been watching the same crisis unfold on television night after night. Fifty-two U.S. citizens were being held hostage in Iran after militants seized the U.S. Embassy in Tehran. ABC’s Nightline coverage became so closely associated with the ordeal that Ted Koppel would open by telling viewers what day of the crisis they were on.

Day 53. Day 200. Day 304.

The hostage crisis had become one of the defining issues of President Jimmy Carter’s reelection campaign. Meanwhile, Ronald Reagan’s campaign began warning that Carter might suddenly get the hostages home just before Election Day and receive a major political boost.

Reagan’s campaign manager, William Casey, began warning about the possibility of an “October surprise,” a dramatic last-minute development that could suddenly change the race.

The phrase stuck.

Ever since, “October surprise” has become shorthand for the kind of unexpected development that arrives late in an election season, changes the conversation, and catches people flat-footed.

Wall Street Has Its Own Version of a Late Surprise

Of course, Wall Street has its own version of this.

I’ve been investing long enough to know that major market shifts often arrive when investors are focused on the wrong thing.

Right now, I believe we may be approaching another one of those moments.

Not because the calendar has some magical power over stocks. In fact, the setup I’m predicting is much more measurable.

Something unusual is developing as we head toward the midterm elections.

Today, I’ll show you why I’m paying especially close attention to the market right now. I’ll tell you how the weeks ahead could create a new group of major winners and losers, and why I’m joining forces with my friend and legendary investor Marc Chaikin of Chaikin Analytics for a special event on September 29 to explain what we’re seeing. (You can click here to reserve your spot now.)

What October Has Historically Meant for the Stock Market

October has earned an unusual reputation on Wall Street.

The crash of 1929 accelerated late that month, with the Dow Jones Industrial Average falling nearly 13% on October 28 and almost another 12% the following day. Nearly six decades later, on October 19, 1987, the Dow plunged 22.6% in a single session. That day is now known as Black Monday. 

And in October 2008, the financial crisis produced another wild stretch of volatility and losses.

Volatility Matters More Than October’s Reputation

But I don’t bring this up because October is inherently bearish – far from it. October has also marked the beginning of some powerful rallies. 

Take October 2022, for example. The S&P 500 jumped about 8% that month, while the Dow surged nearly 14% and the Russell 2000 gained roughly 11%.

So, the lesson isn’t that investors should fear October. It’s that October has repeatedly been a month when the market can change direction in a hurry.

Midterm Years Have Their Own Market Pattern

And that’s why I’m paying especially close attention this year.

In fact, I believe an unusual market event could begin before Election Day on November 3. And history gives this event a 92% precedent going back to 1925. 

I’m not going to give away exactly what we’re seeing just yet. But if we’re right, the market could soon begin separating into a very different group of winners and losers – and waiting until Election Day to figure out what’s happening could be too late.