The market has been pretty reactive, and October’s usual uptrends may have already been priced in, fueled by China’s rate cut and printing money, and larger-than-expected US Federal Reserve rate cuts 50BPS.
However, this momentum was halted by geopolitical events, particularly the Israel-Iran conflict, leading to profit-taking and wiping out late or over-leveraged positions. Early investors likely secured profits and now await clarity from the upcoming elections.
Current uncertainties include:
1. Geopolitics: The Israel-Iran conflict adds unpredictability.
2. Elections: Uncertainty about the outcome is impacting market sentiment.
3. Macroeconomics: While strong jobs data signals economic strength, it complicates the Fed’s rate decisions.
The market is expected to remain range-bound until the elections, with upward momentum likely afterward, regardless of who wins.
A Trump win could bring volatility and institutional participation due to eased regulations, while a Harris win might trigger an initial sell-off followed by a slow recovery.
I recommend avoiding high-leverage trades in this environment, favoring spot positions in undervalued assets and being cautious with active trading.