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What the US Presidential Cycle Predicts for the Stock Market Into 2024

Stock-Markets / Stock Market 2022 Nov 08, 2022 - 09:20 AM GMT

By: Nadeem_Walayat

Stock-Markets

This is what I concluded a year ago in my September 2021 (Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast Sept 2021 to May 2022) analysis -

So the election year cycle favours a strong up year as Uncle Biden prints plenty of dollars for everyone to party, which is basically what we are experiencing. Though next year that Democrat performance slumps to just +0.6%! Which suggests this rally is a time to take profits and de risk, because 2022 according to the Presidential cycle could be weak!


So far so good, what next? We'll for 8 straight decades stock market indices such as the Dow and S&P have headed higher after the ,mid-terms with the average gain being 15%.

That is a 100% probability that stocks will be higher than where they end in October. Whilst the average gain is 15%, the spread tends to be quite large in the range of +10% to +15% which therefore suggests that 2023 will be an up year for stocks. In fact we could see a powerful pre-emptive rally ahead of the Mid-terms from the current state of extreme pessimism. as illustrated by the MACD and sentiment indicator,

Best Time of Year to Invest in Stocks

Statistically the best time of year to buy Stocks is during late October and then hold all the way through to the end of April, for an early May top, whilst the subsequent 6 months tend to be the weakest of the year. What happened this year ?

The Dow ended October 2021 at about 35,750, and traded to a 2022 high of 34,100 early May, which is down 5%. Obviously with the signs of a bear market brewing one would be vary of this pattern for this year. Whilst the subsequent 6 months have turned out to be WEAK, down 18% from early May so at least that part came true. However it is probable that 2023 will see the Buy October Sell in May pattern come good to some degree.

This article is an excerpt form my extensive analysis that concludes in detailed stock market trend forecast into the end of 2023 Stocks Bear Market Max PAIN - Trend Forecast Analysis to Dec 2023 - Part1 was was first made available to patrons who support my work.So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.

Recent analysis includes -

So for immediate first access to to all of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.

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Your watching the British pound burn at the official rate of 10.1% per annum analyst.

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2022 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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