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Legendary investors Louis Navellier and Marc Chaikin have spent decades analyzing stocks using very different systems. But right now, those systems are pointing them toward the same unusual market setup.
In today’s Friday Digest takeover, Louis explains why the weeks surrounding the midterm elections could bring an important shift in market leadership – and why history suggests investors should be paying attention before Election Day rather than waiting to see what happens afterward.
In short, Louis predicts a widening divide between a new group of winners and losers. And he says the historical pattern behind this setup has appeared 92% of the time going back to 1925.
That’s why Louis has recruited Marc – his longtime friend and fellow quantitative-investing pioneer – to join him for the first time at a special Midterm Mayhem event on Tuesday, September 29, at 10 a.m. Eastern. They’ll explain what their respective systems are detecting and share four stocks they’re watching – two they like and two they believe investors should avoid. You can reserve your free spot right here.
Enough introduction. Here’s Louis to explain why he’s preparing for Wall Street’s own version of an “October surprise.”
Have a good evening,
Jeff Remsburg
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.
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.)
October’s Strange Place in Market History
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.
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.
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.
Why Marc Chaikin and I Are Joining Forces
That brings me to my friend Marc Chaikin.
Marc and I have spent decades looking at the market through very different lenses. My proprietary stock-picking system, Stock Grader, focuses heavily on a company’s fundamental strength, while Marc’s Power Gauge analyzes a separate set of signals tied to price action, money flow, and market behavior.
And what we’re seeing now is important enough that Marc and I are joining forces for the first time in our careers to help investors prepare.
In fact, we believe this could be the biggest market event of its kind in more than 30 years.
That’s because several forces that rarely line up at the same time are beginning to converge now. The historical cycle is shifting, market leadership is changing, and both of our systems are starting to pick up on the same underlying move.
That doesn’t mean every stock is about to move in the same direction. Quite the opposite. We believe the next phase could create a fresh group of big winners and losers, which makes knowing what you own especially important.
And if this shift is already beginning, waiting until it becomes obvious could mean missing some of the best opportunities while holding on too long to the stocks most at risk.
That’s why I want you to mark your calendar for September 29 at 10 a.m. Eastern.
Marc and I are holding a special event called Midterm Mayhem.
That’s where we’ll explain what we believe is changing, what investors should be watching, and how you can prepare before this shift fully takes hold.
Plus, we’ll share four free stock recommendations – two stocks we like and two we believe investors should avoid.
And because this is exactly the kind of market setup where being early can matter, I’m also opening up temporary access to my premium Stock Grader tool for folks who sign up.
Go here to reserve your free spot now and give Stock Grader a spin.
Sincerely,
Louis Navellier
Senior Investment Analyst, InvestorPlace
P.S. Louis and Marc will explain what they believe is developing in the market during their special Midterm Mayhem event on Tuesday, September 29, at 10 a.m. Eastern. They’ll also share four free stock recommendations and give attendees temporary access to Louis’ Stock Grader tool. Click here to reserve your free spot and see what Louis and Marc are watching before Election Day.
