Time ▾ Price ▴ Research: Decennial Cycle

Showing posts with label Decennial Cycle. Show all posts

Wednesday, November 6, 2024

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.

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.

Tuesday, November 5, 2024

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.

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

Sunday, September 29, 2024

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%).

TPR - Seasonality.

Monday, September 23, 2024

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.

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.

Thursday, September 19, 2024

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.

Friday, June 28, 2024

July 4th Bullish Pre-Holiday Trade, Bearish After | Jeff Hirsch

Trading the three days ahead of the July 4th Independence Day holiday has historically been stronger than the days after the holiday. Trading on the day before and after the holiday is often lackluster. Volume tends to decline on either side of the holiday as vacations begin early and/or finish late. Since 1980, DJIA, S&P 500, NASDAQ and Russell 2000 have recorded net losses on the day after.

The first Trading Day of July is the most Bullish Day of the Year.

This has become more pronounced in recent years and was the case again last year. However, over the past thirteen years since 2011, trading after Independence Day has softened notably. DJIA has declined ten times in 13 years on the day after. S&P 500 has slipped eight times. Average performance remains fractionally positive. NASDAQ and Russell 2000 have more up days after the 4th but R2K averages losses the two days after the 4th.

Reference:
Jeffrey A. Hirsch (June 28, 2024) - July 4th Bullish Pre-Holiday Trade, Bearish After.

Jeffrey A. Hirsch (June 24, 2024) - Nasdaq’s Midyear Rally from around June 26 to July 12.

Sergey Tarassov (Jun 25, 2024) - DJIA Longterm Forecast Review.

Allen Reminick (June 25, 2024) - High in US-Stocks July 3-5 and Pullback into July 14-26.

Wayne Whaley (June 17, 2024) - The Summer Rally.

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

Robert C. Miner (January 31, 2024) - The S&P 500 and the Election Year Cycle.

July Best S&P & NASDAQ Month Last 21 Years - nearly all gains in first 13 trading days | Jeff Hirsch

Wednesday, June 26, 2024

Are We Due For A Little Mean Reversion? | Jeff Hirsch

I remain bullish on 2024. My 2024 Annual Forecast released on December 21, 2023 is on track, yet the market has already achieved (and slightly surpassed) my Base Case Scenario of average election year gains of 8-15%. While my Best Case Scenario of 15-25% is likely now in play with the market running well above any of the historical seasonal patterns I can concoct, the market may be due for a little reversion to the mean.

The charts here illustrate the three most relevant seasonal patterns: All Election Years, election years with a Sitting President Running for reelection and my STA Aggregate Cycle, which is a combo of all years, election years and the 4^th year of the decade (years ending in 4). The Midyear Rally I discussed early this week is still in play. But after that around mid-July, I would not be surprised if the market were to pull back toward the mean a bit, maybe 5-8%.

There is plenty on the near-term horizon to spook traders from election campaign and political missteps, to Fedspeak, economic data disappointments and just plain old Summer Doldrums.

Quoted from:

Jeffrey A. Hirsch (June 26, 2024) - Are We Due For A Little Mean Reversion?

Sergey Tarassov (Jun 25, 2024) - DJIA Longterm Forecast Review.

Allen Reminick (June 25, 2024) - High in US-Stocks July 3-5 and Pullback into July 14-26.

Wayne Whaley (June 17, 2024) - The Summer Rally.

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

Robert C. Miner (January 31, 2024) - The S&P 500 and the Election Year Cycle.

Friday, March 29, 2024

Crude Oil's 10-Year Leading Indication for US Stock Market | Tom McClellan

One of the big picture forecasting tools is crude oil prices as a leading indication for the overall stock market. The first chart shows crude oil prices back to 1890 compared to the Dow Jones Industrial Average plotted on logarithmic scales. The price of crude oil is shifted forward by 10 years. The correlation isn't always perfect, but generally speaking, when there is a rise in crude oil prices, 10 years later, there is a rise in the stock market. When crude oil prices go flat, the stock market goes flat.

We are not yet quite at that 10 year echo point in stocks, which would equate to June of 2024, 10 years after crude oil peaked. That means the next few years are not going to be so great, especially between now and early 2026. Early 2026 will be a great time for investors to ride the stock market long all the way to 2028.

Quoted from:
Tom McClellan (Mar 28, 2024) - 'Unpleasant Time' Ahead For Stock Market. (video)

Tuesday, December 26, 2023

2024 S&P 500 Election Year Seasonal Pattern │ Jeff Hirsch

2024 is an Election Year and the sitting President is running for office again.

In this constellation the S&P 500 typically tends to (1.) trend higher from early January into mid February;

(2.) decline into late March; (3.) rise up for the rest of the year, especially after elections.

Also take note of Larry Williams' re-election pattern.

The S&P 500's average annual return during Election Years is 11.6%. Since 1833 the fourth year in the Decennial Pattern has been up 13 vs 6 times down with an average annual return of 5.22%. Over the past 30 years, January gains have occurred 17 times (57%), while losses numbered 13 (43%), barely better than the flip of a coin. In bull markets, New Moons are bottoms, and Full Moons are tops. In bear markets, New Moons are tops, and Full Moons are bottoms. More often than not, stocks will rise from around the 7th to around the 14th calendar day of a month, fall from the 14th to the 20th, and rise from the 20th to the 25th.

In 1967 Yale Hirsch published the first Stock Trader’s Almanac and presented the Four Year Presidential Election Cycle as an significant and predictive indicator of stock market performance. The outcomes are relatively steady, regardless of the president’s political leanings in office at the time, and the year after each presidential election marks the start of a new four-year stock market cycle. Considering annual returns of each year in the four year cycle, the Pre-Election Year (2023) is considered best, and the Election Year second. The most predictive period of the year is November 19th to January 19th. Wayne Whaley coined it a 'Turn of the Year (TOY) Barometer'. If the return of this 2-month period is greater than 3%, a bullish signal is given, and the market is very likely to do well over the following 12 months. If the return is 0-3%, the signal is considered neutral; and if the return is negative, the signal is bearish, and returns very poor. Currently the S&P 500 still trades some 6% above the November 19 level.

The 250 year US empire live cycle concluded in 2023. Demise by folly overstretch. Uni-polar global supremacy is over, and Russia, China and Iran stronger than ever. A multi-polar world of worlds now knows how to deal with a paper-tiger gone mad. All star-spangled striped monsters check-mated, defeated and unveiled 24/7 along the many battle fronts on the globe. Project Ukraine lost. Now supervising genocide in Palestine. Yemen's Ansar Allah controls the Bab al-Mandab and launches full front attacks against the hegemon. An emerging Muslim alliance will liberate the Holy Land. Iran may shut down the Gibraltar strait any moment. The Taliban will enter Jerusalem and flatten Tel Aviv. Zionist Saudis and emirs doomed. Revolutionary Shia will root them out. The fever pitch increases. As some discard all this as hysteria and Islamist war propaganda, the dollar hegemony is rapidly melting away under the world island's rising sun. 2024 will be a remarkable 'election year'. W.D. Gann projected 'major panic, breadlines, soup kitchens, despair, and unemployment' into the US of 2024. And US astrologer L. David Linsky sees the home-front ready for more mayhem, upheaval, war and regime change. Plenty of opportunities along the lines and times in the above seasonal roadmap for 2024.

The Kitchin Cycle and the Benner Cycle are bullish for all of 2024 and 2025 (historically the fifth year outperforming all other years in the decennial pattern). In the current decennial cycle Larry Williams identified June 2024 as "the sweet spot with 90% accuracy" to buy stocks until December 2025.