The SPY continues to grind higher as we approach the heart of earnings season in the next two weeks. So far, earnings have been a positive catalyst for the market, with banks uniformly moving higher on their reports. TSM’s earnings on Thursday propelled the stock to new all-time highs, making it the best-performing semiconductor stock since the July sell-off. NVDA also reached a new all-time high on Thursday, but it was a rather tepid move—wicking just 13 cents above its June high before selling off throughout the day. Not exactly the strength we expect in an all-time high breakout.

TSM

Despite the strong performances from TSM, NVDA, and AVGO, the semiconductor ETF, SMH, is still far from its all-time highs and struggling to break out. SMH has been climbing in a choppy, overlapping pattern since its August 5th low, just like much of the market. Stocks like AMD, AMSL, LRCX, AMAT, INTC, QCOM, and MU continue to weigh on the sector, preventing it from reclaiming its former leadership role.

SMH

Speaking of MU, we’ve been dominating that chart for the last month. The RLT Newsletter recently took a trade that made 26% on MU in just 11 trading days and is now in another trade that is up 11% in just 9 trading days. This highly focused tech portfolio is up 106.25% over the 22 months it's been active.

MU

Keep an eye on big tech in the next few weeks, as it has been underperforming the SPY over the last few months. Positive earnings could thrust these names back into favor and extend the market rally, while negative earnings could contribute to a broad market pullback.

Just yesterday, I received my ballot in the mail—I'm a Colorado resident, and it seems they’ve decided that if you don’t know who you’re voting for by now, two and a half more weeks won’t make much difference. With my ballot in hand, it feels like the perfect time to reflect on election statistics and their relationship with the stock market.

The first statistic I’ve seen circulating online is an election predictor based on the S&P 500. The idea is that if the S&P 500 is positive during the three months leading up to election day, the incumbent party typically wins. This rule held true from Calvin Coolidge in 1924 all the way through to George W. Bush in 2004. In fact, the rule has proven accurate in 13 of the last 14 elections where the S&P 500 was positive during those three months prior to the election. The one exception was in 2020, when Donald Trump lost despite the S&P 500 being positive. With the SPY nicely positive during that time period we’ll soon find out whether or not Trump can defy this rule for a second time, this time in his favor.

SPY

Speaking of the presidential elections, Bitcoin is on the precipice of a major breakout after six months of sideways action. It’s possible that a Trump presidency is just what Bitcoin has been waiting for to jumpstart its next leg higher. Trump, often seen as the pro-crypto candidate, spoke very positively about Bitcoin and the entire crypto industry at the National Bitcoin Conference earlier this year. He even went as far as mentioning the possibility of creating a national Bitcoin "stockpile," which had Bitcoin maximalists foaming at the mouth, as the Bitcoin Standard inched one casually uttered phrase closer to becoming a reality.

Trump recently backed World Liberty Financial (WLFI), which is reportedly a DeFi project that will run on Aave and Ethereum. Personally, I don’t think this is a good look for any president or presidential candidate. I think Michael Saylor needs to take Trump aside and give him a stern talk on Bitcoin and the broader crypto ecosystem.

If Bitcoin is able to break out in the next couple of weeks, it would perfectly align with the 200-day post-halving consolidation phase. A solid breakout could lead to at least a 30% increase in price from the time of this writing, but more likely a 50%+ rise into the six-figure range. On the other hand, if this breakout fails once again and Bitcoin starts breaking back below the 100DSMA and 200DSMA, it could drop all the way down to the high $40,000 region while still maintaining a bullish outlook.

BTCUSD