The overall market gapped up earlier this week.
It looked like we might get support for a solid bounce.
But it ended up not holding…
Frankly, I’m not surprised. There are a few big unknowns that could change things quickly in the coming days.
That doesn’t mean there aren’t opportunities.
But for me, I’m trading VERY conservatively this week.
I don’t usually spend a lot of time focusing on big market catalysts.
But overall market volatility tends to go up when there’s uncertainty. The Cboe Volatility Index (VIX) has been testing the elevated level recently.
On Monday, the VIX broke through and hit its highest level since July…
Cboe Volatility Index, 6 months, elevated.
Since I already trade the most volatile stocks in the market, I don’t mind the spike. The biggest penny stock spikers often fly in the face of whatever catalyst is moving the market.
But I do pay attention, because roughly 75% of stocks move with the overall market.
That said, this week there’s more than one reason to focus on quality over quantity.
Big Catalyst Week
There’s a lot going on this week, right?
First, this is a big earnings week.
Specifically for tech, software and cloud companies. For example…
Apple (AAPL), Palantir (PLTR), Advanced Micro Devices (AMD), Super Micro Computer (SMCI), and Qualcomm (QCOM) reported this week.
Then, there’s the elephant in the room: midterm elections were yesterday.
Historically, the market tends to bounce after midterm elections.
The chart below shows S&P 500 returns in the 12 months following midterm elections, from 1982 to present. (That’s every midterm election in my life, so far.)
Why does the market typically bounce after midterms?
Because the political uncertainty leading up to the election is finally over.
But a bounce isn’t guaranteed, okay?
I never try to guess. Instead, I trade conservatively and wait for the market’s reaction (especially this year).
Finally, there’s one more unknown that could affect the markets…
U.S. and Iran negotiators are at it again, pushing for a peace deal.
If a deal is struck, it will be great news for the markets.
But at the same time, we’ve heard about potential strikes after the elections
With all of those potential market-moving catalysts, and the fact that we’re due for a big correction (if not a crash)…
I’m playing it EXTRA safe this week.
Make Your November Count
It’s a brand new month, so the first thing my millionaire students and I do is review our trades from the past month and see how we can improve.
Are you doing this too?
You need to review and optimize to make November 2026 your best month EVER!
Remember, it’s never about perfection. It’s alllll about progress month over month. Financial success is a marathon, NOT a sprint!
If you want to make November your best month EVER, here’s the formula:
1. Review every trade you took last month (if you’ve never traded, now is the time to start).
2. Figure out what you did well and what you didn’t do well.
3. Study your butt off and optimize.
Also, it’s a good reminder that cash is a position (and you do NOT have to trade every day).
And no matter what happens with the elections, earnings or the situation in the Middle East, there will ALWAYS be plays.
It’s up to you to adapt to what the market gives.
The key this week is to ONLY take ideal setups. Everything else is suspect until there’s a clear direction.
If you have any questions, email me at SykesDaily@BanyanHill.com.
Cheers,
Tim Sykes
Editor, Tim Sykes Daily
