CapitalHubs

The stock market and US president cycle

INDEX:SPX   S&P 500 Index
6253 43 11
In paper named “Presidential Elections and Stock Market Cycles” Marshall Nickles, EDD thoroughly describes the evidence for such a connection, examining 15 stock market cycles that have occurred From April 1942 to October 2002             as well as presidential elections for that period. Here I intend to use that methodology to review the last two stock market cycles and find out how they fit to the broader picture.

As chart shows currently we are in the fourth year of the president cycle, the election year, and in the fourth year of the bull cycle (started with the 2009 low). The logic of cycle analysis suggests that applying the presidential year cycle strategy we should wait with investments until mid presidential term - Oct             2014 when market trough is expected.

More about the cycle investment strategy at www.CapitalHubs.com
timwest PRO
4 years ago
Nice chart. It would be wonderful if we saw stock charts look like this with the red background being the week prior to earnings.
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Great chart. Love your analysis. Please keep posting.
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charttrader PRO charttrader
4 years ago
But it seems that this pattern did not work in 1996 (Clinton) and 2004 (Bush). I.e. 2 times out of the 4 cycles. Do you have any explanations? Please keep in mind that i did not read “Presidential Elections and Stock Market Cycles”.
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CapitalHubs charttrader
4 years ago
It is a statistical fact that it is more likely to see market trough during the first or second year of presidential term (check the link). Keeping in mind that average duration of a bull cycle is 3 years, we could expect that if presidential election comes during the early bull market or first two years of the cycle (as during 1996 and 2004) than there is no point of waiting two years to enter the market as the bull run is more likely to continue. If election year, however, coincides with third, fourth year of the bull phase (as in our case) or even with bear market (as happened 2000 and 2008) then you could follow the suggested strategy as there is higher probability for market trough in Oct 2014.
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memie CapitalHubs
4 years ago
I understood, great explanation^^ Tks U.
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joerobinson
4 years ago
follow this chart
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memie
4 years ago
wooooow.. Coool
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phomans
4 years ago
I think October 2014 is probably a little late- It is also a 4- year cycle, which last bottomed in 2013, so it could easily first your pattern (Presidential) and the 4-year cycle from the end of 2009, or the beginning of 2010, and bottom in late 2013, early 2014. 1974-1978-1982-1986(the Boesky low), 1990, 1994, 1998 (Long Term Capital) 2002, 2006, 2010(or late 2009), 2013-2014?
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phomans phomans
4 years ago
I mean to say, "which last bottomed, in the PRES cycle chart, in 2009"
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memie
4 years ago
its happen yesterday
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