I'm not saying there is any correlation but the last three 8 year US presidential cycles have corresponded with record swing highs in the equities market followed by a precipitous drops.
Comments
JamesPowell
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major consolidation going on at the top last few weeks.
StocksAndOptons
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Well, an average economic/business cycle is 7-8 years in length. We are currently in an unusually long expansion.
But are you stipulating that mkt cycles are tied to the political ones?
It is a known fact for instance, that the ruling party's incumbent cant win if a recession started 1 year before the election!
Otherwise an interesting observation!
JamesPowell
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@SweetHomeAlabama, thanks for the interest bubba. we have only just come out of a resession. The odds of a new one starting already are slim to none i suspect. Either way the last one was actually quite positive for the equities markets lol.
I wonder sometimes if this election cycle is somehow different and maybe my 8 year cycle won't hold water. Equity markets keep floating high and higher. Long story short is that the markets continue higher largely because retail traders, contrary to popular belief, applying what we see as common since, we keep selling this market. When retailers and smaller local fund traders are by and large selling then the larger institutional traders with Exchange seats are forced to buy. Our selling and their buying forces, by nature of the auction, the markets to rise.
So in reality, until us retailers and lesser funds give in and start actually buying these equities markets it will continue to drift higher and higher.
It is simply the nature of the greater auction markets.
By the way, if you study my chart example you will see the cyclical momentum shifts often occured the following year after the actual election year. The previous cycle, early into the first year of the new president began what is becoming the longest and sharpest Bull run ever.
Now we are into the early months of a new administration and markets are up precipitously at extreme highs of this market.
It sounds backwards but until we start buying this market it won't come down.