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[BearItch]

I think it is safe to say that we have not seen so much volatility in the third year of a presidential cycle since the 1930s.

Study back to 1915:

Third Year Pres. Cycle History

"I count five times out of the first ten presidential cycles from 1903 to 1939, or 50% of the time, that the market was down in the third year of a president’s term. Two of the declines, in 1903 and 1907 were actually bear markets, with the market being down 22.4% and 37.7% respectively in those years. It was also down 53% in 1931, the third year of Herbert Hoover’s administration (during the severe 1929-32 bear market)."

Study back to 1930:

More Third Year Presidential Cycle History

1935 anyone?

And that tells me this ain't your typical post World War II market. Look at the monthly candle chart for August. I find it interesting that the "fickle finger of fate" (anyone remember that one?), in this case the middle finger, flexed itself and it found the SPX 200 monthly moving average at the exact lows within 1.5 SPX points. Haven't seen us toy with the 200 month moving average since the 1970s.

Now that elongated finger is pointing out that the ultimate direction of the market is down intermediate term, unless you think this is a flash crash done by a flash mob. But I can't find a historical monthly candle that translates this into being good news going forward. That tail is as long as any I have seen.

Economically, at best we are in stagnation (I don't say "stagflation" 'cause, well, show me the "flation") but fundamentals continue to deteriorate not only here in the US but worldwide as well. These are huge economic cycles and they can't be avoided by throwing QE3 around. Too late. Obama's job creation program to be announced next week is too late as well.

Irene is a good model economically for what is going on: you just look it all with awe and realize there is nothing that can be done until nature takes its course.