Both occurred in 2016:
- Brexit: June 23, 2016
On Friday June 24, the morning after the citizens of the UK voted to leave the European Union (EU) the BBT algorithm’s signal was RED indicating a market decline. The one-day gain for those who followed the instructions to purchase the S&P 500 inverse ETF SH, which increases in price when the index declines was 3.4%. On Monday morning June 27, the BBT’s signal changed from RED to GREEN indicating a bottom and an uptrend. The signal then stayed green for four consecutive days, a period for which the S&P 500 long ETF SPY gained 3.5%. The S&P 500 then steadily climbed to new all-time highs before reaching its post-Brexit peak on August 15, 2016. The index gained 8% from June 27, 2016, to the high.
- US Presidential and Congressional Elections: November 8, 2016
On the morning of November 9, 2020, the Bull & Bear Tracker’s signal was GREEN indicating that the market would be in an uptrend. The GREEN signal remaining in effect for 12 consecutive days while the S&P 500 had increased by 3.9% indicating that the market viewed Mr. Trump very favorably. The S&P 500 reached its high for 2016, which was also its all-time high on December 13, 2016. The net gain from the morning after the election to the high was 6.6%.
The video below contains the performance metrics including track records and risk tolerance levels for the BBT algorithm and the products which it powers. For the 12 months ended August 31, 2020, the BBT produced a gain of 97.7% vs. a gain of 18.8% for the S&P 500.
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The 2020 election is the 11th Presidential election since I entered the capital markets when I joined Merrill Lynch in 1977. My article Bulls N Bears’ Election Outcome Scenarios is highly recommended. The article covers the following election outcomes:
- Republican President/Republican Senate/Democrat House
- Democrat President/Republican Senate/Democrat House
- Democrat President/Democrat Senate/Democrat House
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