50% DJIA Gain Possible from 2026 Low to 2027 High | Jeff Hirsch

Historical data going back to 1914 shows that the Dow Jones Industrial Average has typically fallen about 20% from its peak in the year following a presidential election to its trough during the subsequent midterm year. Weakness has been most persistent in Q2 and Q3 of Midterm years. Regardless of the precise level reached, the advance that normally follows is a very attractive entry point for position traders (see tab and chart below).

% Change in DJIA between Midterm year Low and High of following year, 1914-2023.

Within the Four-Year Presidential Cycle, the most favorable phase begins late in the Midterm year: The strongest consecutive two quarters historically run from Q4 of the Midterm year into the Q1 of the Pre-Election year, delivering average gains of 46.3% for the Dow.

 

  S&P 500 Midterm Election Year Seasonal Pattern, 1949-2024.

Q2 of the Pre-Election year is also notably strong—ranking as the third-best quarter of the Four-Year Presidential Cycle—effectively extending this high-performance window to three quarters, from Midterm Q4 2026 through Pre-Election Q2 2027. 

 

Reference:

Jeffrey A. Hirsch (February 11, 2026) - January Barometer Rules: 2026 Midterm Year Forecast Update (webinar). 

 

See also:

Jeffrey A. Hirsch (December 29, 2025) - 2026 Midterm Election Year Seasonal Patterns of US Indices. 

Bill Sarubbi (January 23, 2026) - 2026 Market Forecast: S&P 500, Crude, Notes, Gold, and Bitcoin.

Ned Davis Research (December 31, 2025) - 2026 S&P 500 Composite: Seasonal, Presidential, and Decennial Cycles.