Trading Techniques | OCT 1996
Seasonality and the Presidential Election Cycle by Mark Vakkur, M.D.
Seasonality And The Presidential Election Cycle by Mark Vakkur, M.D. Can you combine politics with seasonality? With the Presidential election coming up, here's a review of some trading strategies for the stock market built around this event. The quadrennial Presidential election-year cycle has a profound influence on the stock market. Stocks tend to advance most strongly during the year immediately preceding and the year of the election, but only tread water during the other two years of the four-year cycle. How, then, might a trader incorporate this phenomenon into a trading system and combine politics with seasonality? As a test, I used the monthly closes of the Standard & Poor's 500 from 1950 through 1995, as I did in my June STOCKS & COMMODITIES article on seasonality. I ignored monthly highs and lows; I was only concerned with the percentage change in the S&P 500 for each given month from close to close. I also ignored dividends.
by Mark Vakkur, M.D.
Technical Analysis of STOCKS & COMMODITIES
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