Market Update Into October 21st: At The Edges Of The Wedges

3 mins read

We’re just three weeks out from the election, and markets are showing cautious optimism—slowly pushing higher as prices contract into the apex of rising wedges across the major indexes. Whether we’ll see a range expansion before the election remains to be seen, but the relative strength despite the uncertainty surrounding the likely winner is hard to argue with. In other news;

While headlines and the political divide between candidates continue to steal the spotlight, the price action paints a more subtle, yet telling picture. Let’s dive into the index charts and see what insights we can uncover.

Weekly Analysis

SPY (SPDR S&P 500)

This week, the SPY ETF closed at another record high of $584.59 (+0.87%), as the price attempts to break free from the rising wedge it’s been trapped in since early August. The CHATS indicator shows a strong uptrend reading that has held steady for nearly a month, and the rising 5-day SMA serves as a key signal to stay the course with bullish positions.

QQQ (Invesco QQQ Trust)

Despite a modest gain relative to last week’s close, the QQQ ETF ended the week in the red at $494.47 (+0.23%). This index remains the weakest of the bunch, with the price hovering just above a flat 5-day SMA and gravitating toward the bottom of the rising wedge. It’s also struggling to maintain the ‘strong uptrend’ signal from the CHATS indicator.

IWM (iShares Russell 2000)

The IWM ETF delivered the strongest performance this week, closing just below the top of its rising wedge at $225.65 (+1.97%). Historically, each test of this wedge’s upper boundary has coincided with a ‘strong uptrend’ reading on the CHATS indicator. However, the recent three-day consolidation is a more constructive pattern than we’ve seen before, suggesting the index could be gearing up for a potential breakout.

Earnings

Notable Results

TSM (Taiwan Semiconductor Manufacturing)

EPS: $1.94 vs $1.77 est
SALES: $23.50B vs $23.10B est

UNH (UnitedHealth Group)

EPS: $7.15 vs $7.00 est
SALES: $100.80B vs $99.28B est

PG (Procter & Gamble Company)

EPS: $1.93 vs $1.90 est
SALES: $21.74B vs $21.91B est

JNJ (Johnson & Jonhson)

EPS: $2.42 vs $2.21 est
SALES: $22.47B vs $22.16B est

ASML (ASML Holding)

EPS: €5.28 vs €4.81 est
SALES: €7.51B vs €6.67B est

BAC (Bank of America)

EPS: $0.81 vs $0.78 est
SALES: $25.49B vs $25.29B est

NFLX (Netflix)

EPS: $5.40 vs $5.12 est
SALES: $9.83B vs $9.77B est

ABT (Abbott Laboratories)

EPS: $1.21 vs $1.20 est
SALES: $10.64B vs $10.55B est

AXP (American Express)

EPS: $3.49 vs $3.28 est
SALES: $16.64B vs $16.67B est

GS (Goldman Sachs)

EPS: $8.40 vs $7.03 est
SALES: $12.70B vs $11.87B est

What’s Happening Now

MCD (McDonalds)

Looking for an election volatility hedge? McDonald’s has consistently outperformed during presidential election cycles, with an average November gain of +2.77% over the past 50 years. McDonald’s thrives on steady demand as a consumer staple globally. Its defensive nature makes it a reliable performer when markets face election-driven uncertainty, and the results speak for themselves.

This is an image of a monthly seasonality chart of MCD.

COST (Costco)

Costco has been on a winning streak in November for 15 years straight. The last time it faltered was during the 2008 financial crisis, but since then, it’s averaged a 5.88% return, even rallying as much as 14.5%. This consistent success likely comes from strong holiday demand and its essential goods model. Will it go 16 for 16?

This is an image of the monthly seasonality chart for COST.

URA (Global X Uranium ETF)

As the election nears, uranium has significantly outperformed all other sectors, with gains of +11% this week and +16% for the month. Silver is not far behind, surging 6% on Friday to reach 12-year highs. Uranium’s strong performance highlights the increasing shift toward nuclear energy, as tech giants like Amazon and Google invest heavily to meet the rising energy demands driven by AI technology.

This is a bubble chart of the URA constituents.

Believe it or not, this is just a fraction of what happened in the markets this week. For a full run down delivered straight to your inbox every weekend, sign up for The Official Trendspider Newsletter!