|Seasonal Projection 4 Year Presidential Cycle|
Saturday, October 29, 2011
Presidential Cycle Update
The year before the presidential election year is well-known for its bullishness. This can be seen in charts of data going back a hundred years or more (as the people at SeasonalCharts can show you.) My SeaPro5 study can show the average trend of a four year cycle going back 20 years (5 election seasons) on a weekly chart, projected from an anchor date. So once a month I like to post an update of where we stand wrt this larger time frame:
The last four weeks have been strongly bullish. The 1227 resistance level was overcome two weeks back after some challenges from bears resulting in the bar with a long lower tail. Then, last week we punched up through the year flat-line (dashed blue line at 1257.54) with what techicians call an "energy" bar, signifying that bears are licking some wounds. I am somewhat surprised that the year flat-line did not turn out to be a resistance level since it was a confirmed support level and broken by a similar energy bar (which just goes to show that TA is not a hard science.) The current projection has the market finishing the year up 100 points or so in the neighborhood of 1350.