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I’ve been digging into some research lately that I think every trader needs to see right now. It’s not about predicting the future or timing every little wiggle in the market — it’s about understanding what history tells us when major geopolitical events hit.
And what I found is both reassuring and unsettling at the same time.
When I analyzed performance after about 25 major geopolitical events, the long-term picture actually looks pretty good. Over a one-year period, the S&P 500 (SPY) averages a 14% gain following these types of shocks.
That means if the pattern holds, we could be looking at the market sitting 10-15% higher 12 months from now — even with all the ugliness we’re seeing today.
However, if you break things down by one, three, six and 12 months, you start to see a different picture emerge. Markets eventually recover, but the path there often tests patience, conviction and discipline.
The One-Month Win Rate That Changes Everything
What I care about most right now is how markets behave when fear strikes — like it seems to be today with a war that caught everyone off guard. These are the moments when emotional reactions create short-term distortions that traders need to navigate carefully.
When I break down the data by shorter time frames, the picture changes dramatically. Over the first month after a major geopolitical event, SPY only goes higher 46% of the time. That’s the win rate.
Now, you might be thinking — OK, so it’s almost a coin flip. Not great but not terrible either.
But here’s the context that makes this number so significant: The normal average monthly win rate in the stock market is 58%. That’s across all years, months and environments. Going from 58% down to 46% is a 12-point drop — and that’s a big deal.
If this number came in at 56%, I’d probably tell you not to worry. If it was 53%, I’d say we’re still in decent shape. But 46%? That’s a meaningful shift in probabilities and a clear signal that volatility tends to pick up before things stabilize.
What This Means for Your Trading
I’m not sharing this to scare you. Maybe some of the downside is already priced in — that’s certainly possible. But over the next few weeks, we’re probably going to see more choppy price action and some bad down days.
Personally, I think we’re likely to test the 200-day moving average before we find a durable bottom. That’s my read based on where we stand now unless something changes dramatically.
But the other side of this? I think it’s going to be really strong. Once the volatility burns off and the market finds support, there should be solid opportunities waiting.
And this is exactly the kind of environment where it makes sense to have trades in both directions. Maintaining a balanced approach — with setups that capture bullish and bearish moves — keeps you from getting boxed in when conditions shift quickly.
Use this period to prepare, not panic. If you understand the probabilities, you can position yourself to take advantage when the odds swing back in your favor.
Graham Lindman
Graham Lindman Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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