Date: October 2012: Financial Insights for the Eschaton
Financial Insights for the Eschaton
From my post of September 13, 2012, I made the following comments: “The Elliott Wave Theorist has done extensive research on those factors that influence re-election outcomes of presidential races. Its research revealed that the stock market is an “excellent indicator” of re-election outcomes. In addition, GDP had a moderately positive relationship to re-election results; and inflation and unemployment rates had “no” significant predictive value. It tested stock-market performance 1, 2, 3, and 4 years prior to elections and found all of them to be significant. However, the 3-year time horizon leading up to the re-election was the most significant."
So, where do stand based on the 3-year time horizon? Given the 3-year time frame, the DJIA has gained approximately 36%. Even though the economy remains weak, GDP growth between 1% to 2%, the 3-year positive trend is how people feel, as measured by the performance of the DJIA, continues to give the edge to President Obama in his re-election bid.
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