The midterms are here, and for the stock market, which might be the best news of the year. I’ve shared seasonal charts for how the market has historically reacted after midterm elections. But there is even more reason to be optimistic. The market could be poised for a huge rally from here if history repeats itself.

Republicans have momentum in polls and betting odds, including Predictit.org. However, voting for whom you want means Democracy will be alive and well, no matter which party comes out on top.

Rough Week

Last week was a tough week, but there was a ray of glimmer on Friday.

The Heat Map shows a strong shift in market breadth with mega-caps getting some action.

The Federal Reserve

I’m hearing some Fed officials moved subtly away from Powell, and I suspect that will continue this week. The Street should be paying attention. There is something going on inside the Fed and it shows a crack in the unity of how much more damage should be levied on Main Street.

Also, keep an eye on the market, which isn’t taking the bait on another 75-basis points (bps) rate hike next month.

Today’s Session

Equity futures have been higher all morning but nothing to write home about.  The big inflation news comes on Thursday with the latest CPI report, and hopefully, by then, we will know the outcome of all the election races across the country.

There is so much going on, and we are working hard to be positioned for a big move, and at the same time, maintain a certain degree of risk management.  A challenge for this year, which has only seen cash eke out gains.