The market reacted positively to Trump’s presidential victory, with the S&P 500 (SPX) gapping up on high volume after four days around its 50-day Simple Moving Average (SMA) support. However, a significant decline on the last day of October erased many of the stock gains achieved earlier in the month. Although Microsoft and Meta reported better-than-expected profits for the quarter, the results only met investors’ high expectations, leading to a muted market response. The post-election breakout has created short-term overbought conditions, as the index moved above the upper Bollinger Band. A short-term technical pullback is likely, but overall, sentiment remains bullish until the next long-term resistance level.
Elon Musk was one of the business leaders most supportive of Trump’s victory. As a result, Tesla (TSLA) broke through at least three significant resistance levels, including a two-year technical consolidation triangle, where previous attempts had failed. This breakout not only closed Tesla’s lagging position among the “Magnificent 7” stocks but made a challenge to its all-time high (ATH) of $414 possible. From PayPal to SpaceX, Musk rarely fails to deliver on his ventures.
Amazon (AMZN) also benefited from election-driven momentum, breaking what some call “The Bezos Wall” at $200. Jeff Bezos plans to sell 25 million shares at this level by the end of 2025—having already sold at least 8 million shares in July. Recently, this $2 trillion giant has been acting like a meme stock, with price swings from a downside gap to a sharp reversal and an upside gap in late October. As $AMZN climbs, its P/E ratio keeps dropping, making it more attractive. The rapid breach of “The Bezos Wall” impressed investors, and this level now serves as support for potential pullbacks.
Bitcoin (BTC) is another standout, breaking a seven-month downward trend in mid-October and surpassing its ATH of $73,750. Meanwhile, industry lobbying and campaign contributions have reached unprecedented levels in Washington, with $130 million directed toward Congressional and White House campaigns in this election cycle. Next year’s U.S. Congress could be among the most crypto-friendly in history. In this market, the concept of “correlation” is nearly irrelevant.
Despite October’s volatility, our long-term investment portfolio gained 0.18%, bringing cumulative gains since May 2020 to 164.86%. Our dynamic investment portfolio rose by 1.49%, reaching an overall return of 85.25% since May 2020. (For more details, please see our latest performance report.) Two structured notes closed by the end of September, one involving SPX and another involving AAPL, AMZN, and GOOGL, resulted in gains of 17% and 11%, respectively. This brings our structured note portfolio’s average return to 14.84% for all closed notes as of October.
Although the market appears overbought technically, November historically performs well for stocks as major indices trend higher toward year-end. With the Santa Claus rally and the election’s conclusion reducing uncertainty, a bullish trend is likely to continue into early 2025.