I have been writing about the
Presidential Cycle Pattern since 1994, using the pattern which is
derived from averaging together SP500 price data in 4-year chunks of
time. One difference in how I do this versus others is that I start
each 4-year period as of November 1 instead of January 1, to better align with
election day. This
week's chart looks at the differences (and similarities) in the
versions of the Presidential Cycle Pattern depending on what type of
president is in office. The green line reflects first term presidents
from a different party than the last president, and reflects the
condition we have now.
» March is typically a sideways month, part of a larger sideways pattern
lasting all the way until late May. The market normally rallies from June to election day. «
[...] A lot of the time, the two patterns behave very similarly. But in March of the election year, there is a notable difference. When a first term president is in office and running for reelection, March is typically a sideways month, part of a larger sideways pattern lasting all the way until late May. March is different, though, when a second term president is in office (red line). [...] The stock market normally rallies from June all the way to election day [November 5] when there is an incumbent running for reelection. And usually an incumbent will win reelection. That is how things normally go.
Larry Williams identified June 2024 in the current decennial pattern
as » the sweet spot with 90% accuracy « to buy and hold until December 2025.
as » the sweet spot with 90% accuracy « to buy and hold until December 2025.
[...] This year we have a challenger who is not an unknown quantity (to Wall Street), who at the moment has a slight lead in the polls. This type of condition is totally backwards from how election years usually go. Add to that the additional unknowns about how President Trump is facing multiple trials for alleged crimes, and we have an election year completely unlike any previous one. So trying to run a forecast model based on how things have gone in prior election years may just not work this year.