All indexes continued their forward momentum. Volume picked up slightly on the S&P500, while the Small Cap Russell saw impressive volume on Tuesday. As I have mentioned before, we are in a fragile uptrend. The S&P 500 has recorded around 46 new highs this year. The market threw me a curveball when I was expecting a fastball. Seasonality and the elections thus far have not significantly affected the market since August. This is the first time in my 34 years that I can recall the market not reacting to this type of seasonality.
The market has been stable for two reasons: first, the absence of selling; and second, and most importantly, the mountain of cash (around $6 trillion) sitting on the sidelines, which has slowly been put to work in small amounts over the last four weeks.
If a pullback occurs, I see it as a buying opportunity. It would not be surprising to see some volatility, whether it arises pre- or post-election. There is a possibility of civil unrest if one side or the other is upset with the election results, leading to potential court action. Given the extreme division in our nation at this time, this could create a situation detrimental to the markets. However, I would still see it as a buying opportunity.
If this occurs, once things are sorted out, I expect a powerful move into year-end and into 2025.
Upstart
Upstart was up nicely today, but I wasn’t particularly impressed. Volume was a little below its average daily levels. I would attribute today’s movement to the Russell 2000 rising. As I’ve mentioned numerous times, I believe the third quarter will mark the bottom of Upstart’s business cycle. If market conditions remain the same, I believe a powerful move will come either right before the earnings report or immediately after. It’s important to remember that market conditions must remain conducive for this to occur.
I have another stock—my second favorite pick—that I believe is about 1-2 quarters away from the bottom of its business cycle. I am looking for it to double or triple in 2025.