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Showing posts with label Election Year Pattern. 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.

Thursday, October 24, 2024

Halloween Trading Strategy Begins Next Week | Jeff Hirsch

Next week provides a special short-term seasonal opportunity, one of the most consistent of the year. The last 4 trading days of October and the first 3 trading days of November have a stellar record the last 30 years. From the tables below:

S&P 500: Up 25 of last 30 years, average gain 1.96%, median gain 1.61%.
NASDAQ: Up 25 of last 30 years, average gain 2.43%, median gain 2.29%.

DJIA: Up 24 of last 30 years, average gain 1.95%, median gain 1.39%.
Russell 2000: Up 23 of last 30 years, average gain 2.34%, median gain 2.56%.

Many refer to our "Best Six Months Tactical Seasonal Switching Strategy" as the "Halloween Indicator" or "Halloween Strategy" and of course “Sell in May”. These catch phrases highlight our discovery that was first published in 1986 in the 1987 Stock Trader’s Almanac that most of the market’s gains have been made from October 31 to April 30, while the market, on average, tends to go sideways to down from May through October.

Since issuing our Seasonal MACD Buy signal for DJIA, S&P 500, NASDAQ, and Russell 2000, on October 11, 2024, we have been moving into new long trades targeting seasonal strength in various sectors of the market via ETFs and a basket of new stock ideas. The above 7-day span is one specific period of strength during the “Best Months.” Plenty of time remains to take advantage of seasonal strength.

Quoted from:
Jeffrey A. Hirsch (October 24, 2024) - Halloween Trading Strategy Treat Begins Next Week.

Election-Year Octoberphobia — Jeff Hirsch, October 9, 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.

October 28th has, on average since 1950, been the strongest day of the year.

S&P 500 average Performance per Day & Day by Day Hit Rate (1928-2024).

S&P 500 Seasonal Pattern for Q4 of the Election Year 2024
- Presidential Cycle in line with the Decennial Cycle.

The Cycle Composite for 2024 combines the 1-year, 4-year, and 10-year cycles.

Trends are more important than levels. — Ned Davis Research, October 15, 2024.

S&P 500 E-mini Futures (daily bars) and current 21-Trading Day Cycle ( ± 3 TD).

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Goldman Sachs' technical strategist Scott Rubner indicates that US stocks are entering a favorable trading environment due to capital flow trends. He expects the quiet period for stock repurchases to end on October 25, with listed companies likely to engage in significant buybacks in November and December, estimated at $6 billion per day, accounting for 21.1% of annual buybacks.

As mutual funds, the largest sellers of US stocks, begin to withdraw before Halloween, this may positively impact stock prices. October marks the end of the fiscal year for most mutual funds, potentially leading to sell-offs of underperforming assets for tax reasons. Rubner noted that all 756 mutual funds, valued at $1.853 trillion, end their fiscal year on October 31, 2024. Historically, American households increase stock purchases in November, with capital inflows into mutual funds and ETFs peaking during this month.

In Q4 2024, the NASDAQ may gain more than double what the S&P gains.

Looking ahead to the US election, Rubner suggests that post-election, market volatility may reset, benefiting various trading strategies. Additionally, strong non-farm payroll growth and shifting inflation expectations are becoming critical market factors, particularly regarding a potential Trump election victory, which may reignite trading interest.

By end of 2024, S&P far above 6,000 — Scott Rubner, October 15, 2024.

Tuesday, October 1, 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.

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!