The Presidential Election Cycle
by Arthur A. Merrill, C.M.T.
It's an election year again. What does history say about them ? This famous technician tells you that
what you've heard about Presidential election years may very well be true.
An election year is in progress. What are the prospects for the markets? We've been told that
traditionally, politicians try to do everything they can to make the years with Presidential elections
scheduled good ones in the market to put voters in a positive frame of mind. Does history confirm this
To check this out, I asked my computer to calculate the percent changes in the Dow Jones Industrial
Average (DJIA) every month since 1898. Then I averaged these changes in each month of the four year
Presidential cycle. We started on the December 1 after a Presidential election and then cumulated the
percent changes up through the next Presidential election year. Figure 1 shows the results.