19 for 19. But Don’t Buy the Headline.

With midterm elections on Tuesday, here’s an interesting market fact.

Now, yes, it’s not like me to post random, somewhat useless market facts, but I thought I’d share this one anyway, just for fun. Don’t worry, I haven’t replaced my process.

The takeaway is to be prepared for a potentially better market, not to buy simply because an election is over. The market still has to confirm the turn.

With that out of the way, look at this.

Across the 19 midterm elections from 1950 through 2022, the S&P 500 was higher twelve months later every single time.

19 elections. 19 positive outcomes. A 100% historical record.

I checked the daily price history using the same 19 elections for all three periods, measuring from the last available close on or before Election Day to three, six, and twelve calendar months afterward:

• 3 months later: Higher 17 of 19 times (89.5%), with an average price return of +7.7%.
• 6 months later: Higher 19 of 19 times (100%), with an average price return of +14.1%.
• 12 months later: Higher 19 of 19 times (100%), with an average price return of +15.1%.

Those returns exclude dividends and a 100% historical record is not a 100% probability of what happens next.

But there’s another detail that matters just as much.

Before anyone sees “19 for 19” and decides to buy the index as soon as the election is over, look at 2018.

The S&P 500 finished 11.7% higher twelve months after that election. Another win for the historical record.

But along the way, it fell 14.7% below its Election Day closing price, reaching its low on December 24, 2018.

That’s almost 15% in the wrong direction before eventually delivering the positive result that looks so reassuring in the statistics.

Higher twelve months later does not mean higher tomorrow.

That is why this is context for me, not a buy or sell signal. I’m not going to ignore deteriorating price action because a historical statistic says things should improve.

I still want to see a confirmed market turn, evidence of institutional buying, and quality stocks emerging from constructive bases.

But if conditions begin to ripen, you can bet I’ll be ready.

I’ll be watching MTS Velocity for the stocks and industry groups showing relative strength, and for individual stocks tightening up and positioning themselves as potential new leaders.

I can prepare for that opportunity without putting capital at risk before my signals appear.

History gives me a reason to pay attention. The price action still has to give me a reason to act.