The Stars Align Over Wall Street

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I’m not superstitious.

I don’t cross my fingers or avoid stepping on cracks in the sidewalk. I don’t turn my baseball cap inside out to help my team eke out a win in extra innings (RIP Orioles World Series hopes). And I certainly don’t wear a lucky pair of socks to help improve my trading results.

Yet despite my focus on price and all things real and tangible on my stock charts, it would be foolish to completely discount many of the natural phenomena that infiltrate our minds and lead us to irrational decisions.

We’re only human. As much as we try to fight it, we’re inexorably linked to nature – the sun, tides, moon, and weather. Yes, these so-called outside influences can have very real effects on our emotions and decision-making…

Let’s also not forget how seasonal trends can shape the markets. I’ve written at length about how strong first-half performances like we saw earlier this year can lead to explosive melt-up moves during the fourth quarter. Of course, there’s no rock-solid guarantee stocks will streak higher into January 2025. But the stack of evidence in favor of an end-of-year rally is getting higher by the day.

And while I wouldn’t use seasonality as the sole reason to buy or sell a stock, it can be a helpful guidepost for mapping out your potential trading decisions and how you view overall market conditions.

When it comes to the unpredictable nature of trading, I’ll take all the help I can get — even if that means turning to some of the more unconventional approaches…

Signs from Above

The turning of the seasons, the sun, the moon, and religious holidays were swirling in my head late last week as I stepped outside to take a nighttime walk around my neighborhood.

While the news might have seemed quiet in the aftermath of the second major hurricane in as many weeks, a lot was happening in the natural world.

A series of solar flares had just sparked a massive geomagnetic storm, supposedly making the northern lights visible well into the southern US.

I had to check it out for myself, so I made the trek to an area of my neighborhood that was (mostly) free of street lights to try to catch a glimpse of this southern miracle. I did notice some faint colors, but nothing quite as spectacular as this image shared by a friend who lives several miles north of us on a sleepy country road:

Is this spectacular light show somehow forecasting an equally impressive stock market melt-up?

I know that sounds a bit silly. Just bear with me…

During my silent neighborhood walk, I realized the stars were literally aligning for a strong year-end push. Solar flares and coiled charts. What could be better?

It’s easy to scoff at these natural wonders and how they affect our behavior. Yet we have no trouble referencing Keynes’ animal spirits when discussing the ebbs and flows of the markets.

What about the conclusion of the Jewish holiday season? The old Wall Street adage “Sell Rosh Hashanah, buy Yom Kippur” has been a timely way to avoid fall volatility. (Yom Kippur concluded over the weekend, by the way…)

Or, what if the moon is forecasting an imminent, rip-roaring rally in silver?

Believe it or not, there are more than a few successful investors taking advantage of these lunar patterns…

Gold’s Crazy Cousin Has a Secret

I wonder how many precious metal bulls know Silver likes to dance in the moonlight.

It might sound crazy. But when silver futures trade within a markup phase, the full moon occurs at key pivot lows (the dip), highlighting excellent buying opportunities.

It was clear as day to the savvy investor paying attention to the lunar cycle earlier this spring. Silver’s rally into the May pivot high was bound to fail.

On the flip side, a new moon signals an extended rally due for a near-term correction.

When silver ripped higher following the May 7th new moon – the opposite of what one would expect during a rally – the clock began ticking for the bulls. Silver peaked less than two weeks later.

Perhaps Silver needs the spotlight, or maybe investors just need a little help from the heavens when it comes to reaching for additional risk. I’ll let the behavioral economists uncover the root cause.

For us speculators, the existence of the relationship and the pattern it creates provides all we need – an edge.

Fast forward today, and investors are adjusting to a burgeoning everything rally. Plus, silver is catching toward those May highs just as the moon and silver market are falling into sync ahead of Thursday’s supermoon.

Regardless of whether you trade silver, consider the words of legendary trader Larry Williams, Any market that can’t get moving when these strong influences [full moon] are being exerted is not a very healthy market.

The Breakout List Gets Longer

Investors are nervous about the upcoming election, inflation data, and what the Fed has up its sleeve as the new rate cut regime takes hold.

But under the surface, the markets are turning the page. Some of the most explosive stocks and sectors are setting up for potentially powerful end-of-year runs. I’ve been talking about it for weeks! The fuse is now lit for stock market melt-up.

Once you cut through the noise, you’ll find silver isn’t the only area in the market ready to rip.

Tech stocks are on the move, along with software names and even some of the forgotten pandemic trades.

I’m sure many of these names ring a bell. MicroStrategy (MSTR), Palantir (PLTR), Palo Alto Networks (PANW). These were the stocks on everyone’s watchlist following the Covid lockdown.

Remember Datadog (DDOG)? After bottoming in the spring of 2020, it ripped 525% into its 2021 peak! Fast forward a few years, and it feels like the market is entering a similar environment.

Palantir (PLTR) is printing new all-time highs and triple-digit returns (up 149%) after completing a multi-year base. MicroStrategy (MSTR) is slicing through resistance, up 191% year-to-date. And Palo Alto Networks (PANW) is on the verge of breaking out.

More and more tech stocks are popping up as I scan the markets… tickers I haven’t considered buying in years.

These breakouts are as real as it gets…

But remember, we’re still dealing with the markets and the unpredictable nature of trading. Many of the concepts I’ve talked about today are unconventional, or even far fetched.

We’re only human. Our minds, nature, and other outside forces will always lead us into irrational decisions. Right now, the market, along with the sun, moon, and stars, are hinting that investors are about to lose all inhibitions.

Don’t let the melt up catch you off guard.

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