Living in interesting times

What's about to happen? Good question.

You can read the recent pattern various ways.

1. It is a super bullish pattern breaking into a series of 1's and 2's.

2. It is an overlapping move so is just correctional.

3. It is forming a series of rising lows counteed 0-4 which will explode or collapse.



Ferrera is not that much different from the standard presidential (4 year) cycle and decennial (10 year) cycle expectations which suggest a surge is imminent.



Frankly I don't know.

Looking at previous elections I see :-

1. 1996 Clinton saw a low July 24.

2. 1984 Reagan saw a low July 25.

3. 1972 Nixon saw a low July 18.

Yes, my next cycle low after June was Oct/Nov, but I find it hard to believe the market will be seriously lower by elections. It doesn't happen.

NO president can survive if the market tanks from here.

It won't happen IMO. The caveat is that any plunge will be followed by an eaqually awesome bounce.

What's about to happen? Good question.

You can read the recent pattern various ways.

1. It is a super bullish pattern breaking into a series of 1's and 2's.

2. It is an overlapping move so is just correctional.

3. It is forming a series of rising lows counteed 0-4 which will explode or collapse.



Ferrera is not that much different from the standard presidential (4 year) cycle and decennial (10 year) cycle expectations which suggest a surge is imminent.



Frankly I don't know.

Looking at previous elections I see :-

1. 1996 Clinton saw a low July 24.

2. 1984 Reagan saw a low July 25.

3. 1972 Nixon saw a low July 18.

Yes, my next cycle low after June was Oct/Nov, but I find it hard to believe the market will be seriously lower by elections. It doesn't happen.

NO president can survive if the market tanks from here.

It won't happen IMO. The caveat is that any plunge will be followed by an eaqually awesome bounce.

Nixon



Reagan



Clinton

If I didn't make the point before, these were the re-election years. So an Obama re-election suggests NOW is when markets rally!

If I didn't make the point before, these were the re-election years.

So an Obama re-election suggests NOW is when markets rally!

I was aware of election year actions but your detailing of it is great. Thanks!

nicely done...

Using '72, '84 and '96 as analogs for this election year is just silly, and trading on it is probably not good for equity.

Average real GDP growth in 2 quarters prior to those 3 elections was about 5.9%.

Real GDP % growth rate in 2 quarters prior to election and SPX from ~8/01 to ~11/01:
1972 9.8 3.9 Ave 6.85 SPX +3.7%
1984 7.1 3.9 Ave 6.5 SPX +8.4%
1996 7.1 3.5 Ave 5.3 SPX +8.2%

No surprise that markets were moving higher with great GDP growth. And the incumbent party won each election.

When GDP growth was less than 2.8% in the last 40 years markets have generally suffered during the election year:
1976 3.0 2.0 Ave 2.5 SPX +0.0%
1980 -7.9 -0.7 Ave -4.3 SPX +5.0%
2008 -3.7 -8.9 Ave -6.3 SPX -17.7%

And the incumbent party lost each election.

Growth rates between 2.8 and 4.3% are a mixed bag for markets:
1988 5.2 2.1 Ave 3.65 SPX +1.0%
1992 4.3 4.2 Ave 4.25 SPX -3.9%
2000 8.0 0.3 Ave 4.15 SPX +2.8%
2004 2.6 3.0 Ave 2.8 SPX -1.2%

The incumbent party won two and lost two.

This year fits the '76/'80/'08 mold with calendar Q2 GDP growth estimated to be anywhere from .3 to 1.5% and Q3 likely to be less yet, perhaps negative, averaging somewhere between zero and 1.5% at best. Not likely to be conducive to strong markets.

All GDP data is from BEA's NIPA tables.

Edited by ..., 25 July 2012 - 06:22 AM.

When you consider that one man, by the name of Bernake, could mouth a few words and cause a moon launch, its not too far fetch. When you consider that another single man, by the name of Mario Draghi, could mouth a few words and cause a launch to another galaxy, one needs to be extraordinary careful taking the other side - those words could take you out before you wake up in the morning.

Edited by salsabob, 25 July 2012 - 08:03 AM.