Presidential Election Day to Yearend Historically Bullish │ Jeff Hirsch

With a clear winner decided, the history of market gains from Presidential Election Day to year-end is encouraging. As shown in the tables above and below, the market tends to rally from Election Day to year-end, with a few exceptions due to exogenous factors.

 DJIA up 72.2% of the time, with an average gain of 2.38%.
S&P 500 up 66.7% of the time, with an average gain of 2.03%.
NASDAQ up 76.9% of the time, with an average gain of 1.50%.
Russell 2000 up 61.5% of the time, with an average gain of 4.93%.

Profit-taking at the end of 1984 kept stocks flat after the rally from the July bear market bottom, driven by anticipation of Reagan’s landslide reelection victory. The infamous undecided election roiled stocks at the end of 2000 amid the dot-com bear market of 2000-2001. The Great Financial Crisis and the 2007-2009 generational bear market caused a further plunge in late 2008, fueled by shrinking economic data and uncertainty surrounding a change in party and the incoming, unknown Obama administration. The escalating European Debt Crisis kept the stock market on edge in late 2012.

 » Bullish update: We have a winner. «

Jeffrey A. Hirsch, November 6, 2024.

Overall, from Election Day to year-end, the DJIA is up 72.2% of the time, with an average gain of 2.38%. The S&P 500 is up 66.7% of the time, with an average gain of 2.03%. The NASDAQ is up 76.9% of the time, with an average gain of 1.50%, and the Russell 2000 is up 61.5% of the time, with an average gain of 4.93%.

Reference:
Jeffrey A. Hirsch (November 6, 2024) - Presidential Election Day to Yearend Historically Bullish.

 

See also:

Jeffrey A. Hirsch (November 5, 2024) - Bullish Novembers in Election Years Have Weak Seasonal Points.

Jeffrey A. Hirsch (2011) - S&P 500 Projection Chart from 2009 to 2025.
Ryan Detrick (October 28, 2024) - Best Six-Month Stretch for the S&P 500 Begins in November.

Bullish Novembers in Election Years Have Weak Seasonal Points │ Jeff Hirsch

The first 5-6 trading days are typically bullish, followed by weakness in the week before Thanksgiving. The DJIA and S&P 500 strength has shifted to mirror the NASDAQ and Russell 2000, with the most bullish days occurring at the beginning and end of the month.

 

Jeffrey A. Hirsch, November 5, 2024

 

 November Performance in “All Years” (1930-2015) and “Election Years” (1932-2012) 

— Jeff Hirsch, November 15, 2016.

 

November Market Performance (2001-2021) — Jeff Hirsch,  October 20, 2022.

 

 S&P 500 and Nasdaq average performance during the presidential election week.

 

See also:

Jeffrey A. Hirsch (2011) - S&P 500 Projection Chart from 2009 to 2025.
Ryan Detrick (October 28, 2024) - Best Six-Month Stretch for the S&P 500 Begins in November.

 

S&P 500 Seasonal Pattern for November of the Election Year 2024.
Alternative approach: 4-Year Presidential Cycle in Line with the Decennial Cycle.

S&P Cycle Analysis - Time and Price Projections Update | Steve Miller

The upcoming week marks the pre-election period, where heightened election anxiety and a significant earnings schedule are expected to drive high volatility. This trend is likely to continue through election day. Historical analysis shows that the September to November timeframe has often been associated with increased risk, frequently leading to substantial market corrections.

 

SPY (weekly bars), the MACD, and the extreme stretch between the 13-week and 89-week 

moving averages, which historically always leads to extended corrections.

 

Stocks have demonstrated remarkable resilience, displaying behavior that can be characterized as extreme. The above weekly chart of the SPY highlights this dynamic, tracking the moving average convergence divergence (MACD) alongside the distance between the 13-week and 89-week moving averages. Currently, the MACD indicates an unusually wide gap between these averages, suggesting a potential correction on the horizon.

 SPY (weekly bars), six-month cycles, three-month cycles.

When such corrections occur, they can be quite severe. Although the market has remained strong, November and December are anticipated to experience downturns due to the current extremes, which could lead to several challenging weeks ahead. Nevertheless, broader analysis suggests that the bull market may extend into 2025 before facing a significant downturn, potentially resulting in years of low or negative returns in the stock market.

 SPY (daily bars) and 21-trading day cycles with projected ideal troughs around 

November 6 (Wed) and December 4 (Wed), with a margin of ±3 trading days.

An examination of the SPY across various timeframes, including weekly and two-hour metrics, reveals a deterioration in the two-hour indicators, often the first sign of an impending correction. Historical examples, such as the market's reaction following the 2016 Trump election, highlight the potential for volatility. On that occasion, the Dow fell nearly 800 points before rebounding. Similar large movements are anticipated in the days leading up to and following this forthcoming election. While signs of a downturn have been expected for weeks, the market continues to set the course, underscoring its ultimate authority.

Reference:
Steve Miller (October 25, 2024) - S&P 500 Cycle Analysis - Time and Price Projections Update (video)

 

 

Hurst Cycles in the S&P 500 — David Hickson, October 9, 2024.

October Volatility After Big Gain First Three Quarters | Jeff Hirsch

The history of years with gains of this magnitude at this juncture in the year with solid Q3 and September upside performance for the most part have been followed by more bullish market behavior and a continuation of the rally. But as you can see in the table of S&P 500 Performance Following Big Q3 Year-to-Date Gains the bulk of any damage occurred in October.

Jeff Hirsch — September 25, 2024.

Of the top 30 S&P 500 9-month gains since 1930 all 30 years ended higher with average gains of 25.9%. Q4s were up 24, down 6, average gain 4.6%. Octobers were up 15, down 15 with an average gain of 0.01%. Of the most recent 12 occurrences October is down 7, up 5 with an average loss of -1.1%, which includes the Crash of 1987 and a -21.8% loss for October 1987.

Quoted from: 

Jeffrey A. Hirsch (October 1, 2024) - October Volatility After Big Gain First Three Quarters.

S&P 500 Seasonal Pattern for the Presidential Election Cycle 2024 - 2027

 S&P 500 Seasonal Pattern for the Presidential Election Cycle 2024 - 2027.
4 Year Presidential Cycle in line with the Decennial Cycle.

The chart above is an attempt to merge the Decennial Cycle with the Four-Year Presidential Election Cycle by creating a composite of all US presidential elections that took place since 1900 in the fourth year of a decade (1904, 1924, 1944, 1964, 1984, 2004). 

 S&P 500 Seasonal Pattern for the Election Year 2024.

 

S&P 500 Seasonal Pattern for Q4 of the Election Year 2024.

 

 S&P 500 Seasonal Pattern for October of the Election Year 2024.

 

 S&P 500 Seasonal Pattern for November of the Election Year 2024.

 

 S&P 500 Seasonal Pattern for December of the Election Year 2024.

 S&P 500 Seasonal Pattern for the Post-Election Year 2025.

 

S&P 500 Seasonal Pattern for Q1 of the Post-Election Year 2025.

Cross check dates with historical trends, price probabilities, news calendar, Hurst cycles, etc.

The four-year presidential election cycle has a profound impact on the economy and the stock market, with a distinct pattern emerging over time. Notably, the four-year cycle has become a more significant driver of market behavior than the decennial cycle, except in extraordinary years such as those ending in five and eight. In recent decades, the US has experienced a period of unprecedented prosperity, with returns distributed relatively evenly across the decade. Fourth years, in particular, have tended to perform better than average. Looking back, the last six election years ending in four (2004, 1984, 1964, 1944, 1924, and 1904) the S&P 500 averaged a full-year gain of 14%.

 Decennial Cycle: Average annual change in the DJIA (1881-2024).

The 5th year is by far the best year of the decennial cycle. In the Dow Jones Industrial Average out of the last 14 "5th years", 12 were up averaging a return of 26% per year. The only two 5th years that have ever been negative in the history of the DJIA were 2005 (-0.61%) and 2015 (-2.2%).

See also:

Jeffrey A. Hirsch (2011) - S&P 500 Projection Chart from 2009 to 2025. 

TPR - Seasonality.

S&P 500 Election Year Pattern during Fourth Years of a Decade, 1904 - 2024

Seasonal Pattern of the S&P 500 in U.S. Election Years during Fourth Years of a Decade (1904-2024): Composite Line of Election Years (1904, 1924, 1944, 1964, 1984, and 2004; based on daily closes from Stooq) vs. S&P 500 Performance from January 1 to September 27, 2024 (y-axis scale: percentages).

Same values with different scaling of the y-axis.

See also:

Wayne Whaley (September 21, 2024) - S&P 500 in Q4 After New 12-Month High in September.

Tom McClellan (March 29, 2024) - Crude Oil's 10-Year Leading Indication for US Stock Market.

Jeffrey A. Hirsch (2020) - Election-Year October Market Performance Volatile since 1950.

2016 - Presidential Cycle - Seasonal Cycle - Decennial Cycle of DJIA — January 5, 2016.
Jeffrey A. Hirsch (2011) - S&P 500 Projection Chart from 2009 to 2025.

S&P 500 Projection Chart from 2009 to 2025 | Jeff Hirsch

We are revising our 15-Year Projection chart. This was first drawn in 2011 when our book Super Boom: Why the Dow Jones Will Hit 38,820 and How You Can Profit From It (Wiley) hit the stores. The projection was based upon, drawn from, years of historical patterns and data. In the years to follow numerous unprecedented events occurred, the Fed held its key lending rate in a range of 0 to 0.25% for an incredible seven years, under took multiple rounds of quantitative easing (QE) and essentially pledged unwavering support for the market. Many other nations and central banks around the world were taking similar or even more aggressive steps to support their own economies and markets. Negative interest rates and negative yields on 10-year bonds are not what we consider normal.
 

 

 

Our current updated projection is illustrated in the red line in the chart. In keeping with the history of market performance in pre-election years and the current trajectory of the indices, it would not surprise us for the market to continue rising through April make new high here in Q2, then pause over the weaker summer months before hitting higher highs toward yearend. Next year promises to be an embattled election year and the likelihood of another significant correction or even a bear market are higher.

 

Quoted from:
Jeffrey A. Hirsch (April 11, 2019) - Super Boom Is Underway!

 

 

 David Hickson: Hurst Cycle Projection for NASDAQ and S&P 500 — September 9, 2024.

 

 Jeffrey A. Hirsch: S&P 500 after Quadruple Witching Week — September 17, 2024.

 

Jeffrey A. Hirsch: S&P 500 Seasonal Pattern for September 2024 — September 5, 2024.

   

Jeffrey A. Hirsch: S&P 500 Seasonal Election Year Pattern for 2024 — February 28, 2024.

 

Robert Miner: S&P 500 and the Election Year Cycle — April 25, 2024.

 

 Ned Davis: S&P 500 Cycle Composite for 2024 — February 2, 2024.

 

Ned Davis: DJIA Presidential Cycle 2024 to 2027 — December 29, 2023. 

 

Ned Davis: Unprecedented Times vs DJIA Election Cycle — August 14, 2024.

 

Nautilus Research: Full View of the S&P 500 Election Cycle — September 1, 2022.

 

  Moore Research: S&P 500 23 Year Seasonal (1997-2019) — January 2, 2020.

Larry Williams: 2024 US Stock Market Outlook — December 15, 2023.

 

 Ned Davis: DJIA Decennial Cycle for 2021-2030 — February 2, 2024.

 

seasonax: DJIA Decennial Cycle & 4 Year Election Cycle — 2024.

 

September Quadruple Witching Week Dodgy, Week After Dreadful | Jeff Hirsch

Since the S&P index futures began trading on April 21, 1982, stock options, index options as well as index futures all expire at the same time four times each year in March, June, September [20 - Fri], and December. September’s quarterly option expiration week has been up 54.8% of the time for S&P 500 since 1982. DJIA and NASDAQ have slightly weaker track records with gains 52.4% of the time and 52.4% respectively.

However, the week has suffered several sizable losses. The worst loss followed the September 11 terrorist attacks in 2001. In the last twenty-one years, S&P 500 and NASDAQ are tied for best record during September’s quarterly option expiration week, up thirteen times, but NASDAQ has been down the last six straight. Friday had been firm with all three indices advancing every year 2004 to 2011, but S&P 500 has been down 11 of the last 12 and NASDAQ has been down 10 of the last 12 since.

S&P 500 Down 27 of 34 Week After September Quarterly Options Expiration, Average Loss 1.06%

The week after September options expiration week, has a dreadful history of declines most notably since 1990. The week after September quarterly options expiration week has been a nearly constant source of pain with only a few meaningful exceptions over the past 34 years. Substantial and across the board gains have occurred just four times: 1998, 2001, 2010 and 2016 while many more weeks were hit with sizable losses. In 2022 DJIA and S&P 500 declined over 4% while NASDAQ fell 5.07%.

Full stats are the sea-of-red in the tables here. Average losses since 1990 are even worse; DJIA –1.09%, S&P 500 –1.06%, NASDAQ –1.06%. End-of-Q3 portfolio restructuring is the most likely explanation for this trend as managers trim summer holdings and position for the fourth quarter.

Reference:
Jeffrey A. Hirsch (September 17, 2024) - September Quarterly Options Expiration Week Dodgy, Week After Dreadful.

See also:

Wayne Whaley (September 14, 2024) - September 19-26 Weakest Seasonal S&P Week of the Year.   

David Hickson (September 12, 2024) - Hurst Cycle Projection for the NASDAQ and S&P 500.

Jeffrey A. Hirsch (September 5, 2024) - S&P 500 September 2024 Seasonality.

S&P 500 September 2024 Seasonality | Jeff Hirsch

The Bull Market is still intact but wait for a fatter pitch. Ramped of election uncertainty, extended valuations, some big earning misses and a few troubling economic data points helped the worst month of the year deliver an opening blow. Fund managers tend to sell under-performers, restructure portfolios and window dress ahead of the end of Q3. Also a tough month in election years. 

 

 Sep 03 (Tue) = High | Sep 09-10 (Mon-Tue) = Low | Sep 12 (Thu) = High 

Sep 18 (Wed) = Low | Sep 20 (Fri) = High | Sep 26-27 (Thu-Fri) = Low

Jeffrey A. Hirsch @ Twitter/X - Feb 28, 2024 

[STA Aggregate Cycle = Combo Of All Years] 

There have been some nasty selloffs near month-end over the years. The week after [September 20, 2024 (Fri)] Quadruple Witching has been brutal, S&P 500 down 27 of the last 34, averaging a loss of 1.06%. In 2022, DJIA, S&P 500, and NASDAQ all dropped 4% or more.

September Weakness & October-phobia loom large. Bullish election forces at play, but September-October are the worst months of the election years. Lack of clarity about economy, election and Fed’s next move. Expect chop and sideways action over next several weeks w/ a likely test of the lows. This should set up the Q4/post-election rally. So be patient and be ready for the fatter pitch later in Q3 or early Q4.

Quoted from:
Jeffrey A. Hirsch (September 5, 2024) - Tough September Off to Rough Start.  

See also:
Martin Armstrong (July 14, 2024) - Panic Cycles Week July 15 - 19 & Week September 9 - 13.
Martin Biber (August 29, 2024) - Decoding S&P 500 Seasonality.
Sergey Tarassov (June 26, 2024) - 2024 DJIA vs 40 & 42 Month Cycles.
TPR (August 28, 2024) - Cosmic Cluster Days - September 2024.