A Partisan Look at Fall Seasonality: 1915-2007
One of Wall Street's dirty little
secrets is that Septembers and Octobers are particularly
dangerous when a Republican is President. This begs the question why no one has ever looked
at the
data this way. But I'll leave that subject for another day.
I have
often heard that September is month when the market declines much more often than
it rallies. And that Octobers often bring a conclusion to bear markets
and bearish corrections.
The study here
of DJI statistics and charts from 1915 to 2006 shows that it is very important for
investors and traders to make note of whether it's a Democrat or a Republican
holds the Presidency.
My study here shows the history of the DJI in Septembers and Octobers since 1915.
As we approach
this FALL period, the study may help you. I hope so.
Here's the
biggest surprise. When a Democrat was President, the
DJI rose in 26 Septembers
and fell in 20. But when a Republican was in office, the DJI rose in
only 18 Septembers and fell in
28. With a Republican President, for the whole
September-October period the DJI gained in 26 cases
and fell in 20 instances. An October bottom is a somewhat common How did the market do in the 7th year of a President's term? With a Democrat in the White House
it rose in all 3 Septmbers and in all 3 Octobers. With a Republican in office, it fell in all 3 Septemberss.
With a Republican in office, it fell in all 3 Septembers and in two of the three Octobers. Things do not
look good for next month. (Our Peerless Stock Market Timing system gave a near-perfect major
Sell on July 17th with the DJI-30 tagging 14,000. Today it fell 200 points and is probably going lower.)
.
September and October in the 7th Year of The Same President's Term
(Prices shown below are those for the DJJI-30)
End of Aug, End of Sept. End of October
--------- ------- --------------
Wilson (Dem) 1919 104.80 111.40 118.90
Up all year but 12% decline July to August and 13% decline Oct-December.
--------------------------------------------------------------------------
Hoover (Rep) 1931 139.40 96.60 100.70
Year-long bear market
--------------------------------------------------------------------------
FDR (Rep) 1939 134.40 150.20 151.98
DRally late August to September.
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Truman (Dem) 1951 270.30 271.20 262.40
September peak. 8% decline to November,
-------------------------------------------------------------------------
Eisenhower(Rep) 1959 674.90 664.40 631.70
July peak, head and shoulders, September bottom and steady recovery.
-------------------------------------------------------------------------
Reagan (Rep) 1987 2662.95 2596.28 1993.53
Republican up until August peak. October was 40% lower.
-------------------------------------------------------------------------
GBush (Rep) 2003
Septembers and Octobers Behave Very Differently
When A Democrat Is President from When A Republican Is President
in the Third Year of a Four-Year Presidential term
When A Democrat Was President The DJI Rises 67% of Septembers
and 67% of Octobers between 1965 and 2006.
When a Democrat was President, in the third year of the 4-year Presidential
cycle, Septembers produced a DJI rally in 8 cases and a decline in 4 years. Octobers
show the same ratio, 8 up and 4 down. Over the two month period, there were
9 years when there were gains and 3 years when there were declines in the
third year of a Democrat's Presidential 4-year cycle.
Democrat as President and 3rd Year of 4-Year Presdential Cycle
Septembers Up Octobers Up September-October Up
------------- ----------- --------------------
1915 1915 1915
1919 1919 1919
1935 1935 1935
1939 1939 1939
1943 (war) 1947 (war) 1943 (war)
1951 (war) 1963 (war) 1947 (war)
1963 1967 1963
1995 1999 1967 (war)
1995
Septembers Down Octobers Down September-October Down
--------------- ------------- ----------------------
1947 1943 (war) 1951 (war)
1967 (war) 1951 (war) 1979
1979 1979 1999
1999 1995
===============================================================
When A Republican Was President, The DJI Falls 64% of September
and 73% of Octobers from 1915 to 2006.
When a Republican was President, in the third year of the 4-year Presidential
cycle, Septembers produced a DJI rally in 4 cases and a declline in 7. Octobers
show only 3 up but produced 8 down-months. Over the two month period, there were
5 years when there were gains and 6 years when there were declines in the
third year of a Republican's Presidential 4-year cycle.
Republican as President and 3rd Year of 4-Year Presdential Cycle
Septembers Up Octobers Up September-October Up
------------- ----------- --------------------
1927 1975 1971
1959 1991 1975
1971 2003 (war) 1983
1983 1991
2003 (war)
Septembers Down Octobers Down September-October Down
--------------- ------------- ----------------------
1923 1923 1923
1931 1927 1927
1955 1931 1931
1975 1955 1955
1987 1959 1959
1991 1971 1987
2003 (war) 1983
1987
Full History of DJI in Septembers and Octobers, 1915-2006
DJI-30 DJI-30 DJI-30
August September October
Close Close Close
1915 81.20 + 90.60 + 95.30 Democrat up all year except for 18% decline from April to May.
1916 92.30 103.70 104.60 Democrat 10% decline March-July and 18% decline Nov-December.
1917 83.40 83.50 75.50 Democrat 30% decline from May to December.
1918 82.50 84.70 84.10 Democrat Up all year until October-December 10% decline.
1919 104.80 +111.40 + 118.90 Democrat Up all year but 12% decline July to August and 13% decline Oct-December.
1920 86.40 84.50 85.00 Democrat Down all year
1921 67.10 67.80 73.20 Republican April top - Intermed Corrections end August
1922 100.80 97.10 96.90 Republican strong yearly advance with October peak
1923 93.50 - 88.00 - 85.90 Republican Year's decline ends in late October.
1924 104.10 103.20 104.10 Republican Year's rally starts in May.
1925 141.20 145.10 155.70 Republican Year long rally peaked in late October.
1926 162.50 158.20 151.50 Republican August to early October 12% decline.
1927 189.80 +197.60 - 181.70 Republican August to late October 9% decline.
1928 240.40 237.40 252.20 Republican November peak and 12% decline.
1929 380.30 343.50 258.50 Republican August peak and 45% decline ends in early Nov.
1930 240.40 204.90 188.10 Republican Year-long bear market.
1931 139.40 - 96.60 - 100.70 Republican Year-long bear market
1932 73.20 71.50 61.90 Republican On going-bear market.
1933 103.70 94.28 88.20 Democrat Market rising up from Feb.
1934 92.90 92.50 93.40 Democrat Turn-around in Sept.
1935 127.40 +131.90 + 139.70 Democrat Up-market all year.
1936 166.30 167.80 177.20 Democrat Up market after March-April 12% decline
1937 177.90 154.60 138.50 Democrat Heavy distrbution, March peak. 37% Decline
1938 139.30 141.50 151.70 Democrat After March bottom, year-long rally.
1939 134.40 +150.20 + 151.98 Democrat Rally late August to September.
1940 128.90 132.60 134.60 Bemocrat May bottom after W.Europe invaded.
1941 127.40 126.80 119.20 Democrat Year-long bear market.
1942 106.30 109.10 113.50 Democrat After April bottom, up for rest of year.
1943 136.60 +140.10 - 138.30 Democrat 7/17 peak and 12% decline until November.
1944 147.00 146.30 146.50 Democrat up slowly all year.
1945 174.30 180.10 186.60 Democrat up all year strongly.
1946 189.20 172.40 169.20 Democrat May peak and 22% decline.
1947 178.90 -177.50 +181.80 Democrat Up from May bottom after 3 month 12% sell off.
1948 182.10 179.00 188.30 Democrat June peak and 12% decline until November.
1949 178.70 182.40 189.50 Democrat Up from June bottom.
1950 216.90 226.40 225.00 Democrat Up from July bottom.
1951 270.30 +271.20 -262.40 Democrat September peak. 8% decline to November,
1952 275.00 270.60 269.20 Democrat August peak and 5% decline ends in October.
1953 261.20 264.00 275.80 Republican Year-long decline ends in September.
1954 341.30 360.50 352.10 Republican year long rally.
1955 468.20 -466.60 -454.90 Republican year long rally.
1956 502.00 475.30 479.90 Republican Broad trading range: Aug. oeak and Nov. bottom.
1957 484.40 456.30 435.00 Republican July S9 oeak and 20% decline.
1958 508.60 532.10 543.30 Republican year long rally.
1959 674.90 +664.40 -631.70 Republican July peak, head and shoulders, September bottom and steady recovery.
1960 605.60 625.90 580.10 Republican year long decline ends in October.
1961 705.10 716.90 701.20 Democrat year long rally.
1962 561.30 591.90 609.20 Democrat year long decline ends in October
1963 729.30 +732.80 +755.20 Democrat year long rally.
1964 838.50 875.50 873.10 Democrat year long rally.
1965 893.10 932.40 959.10 Democrat year long rally. 10% correction from march to June.
1966 788.41 774.22 807.10 Democrat year long decline ends in OCtober.
1967 904.24 -901.29 +926.66 Democrat rally until S12 peak in Sept. 10% decline to Nov. bottom.
1968 896.01 935.79 952.39 Democrat 10% decline until March and then up for rest of year.
1969 836.20 813.90 855.99 Republican year long decline.
1970 734.73 764.58 750.68 Republican decline to a May bottom, then up.
1971 858.43 +898.87 -887.19 Republican Up until April, Down until November and then up.
1972 924.74 963.73 953.27 Republican up slightly all year.
1973 926.40 890.16 947.10 Republican Down until August, up until Oct and then down.
1974 678.58 607.80 665.52 Republican Down all year.
1975 835.34 -793.88 +936.04 Republican up until July peak.
1976 904.64 968.92 990.15 Republican September peak and 10% decline to November bottom.
1977 861.49 847.11 818.35 Democrat year long decline with temporary October bottom.
1978 880.72 865.82 792.45 Democrat up until early September and then 14% decline with Npov. bottom.
1979 887.63 -878.58 -815.70 Democrat Up until September and then 12% decline in October.
1980 932.59 932.42 924.49 Democrat Down until march, then up until November. Then 10% decline and up.
1981 881.47 849.98 852.55 Republican April peak amd 2-% decline until September.
1982 901.31 896.25 991.72 Republican August bottom and then strongly up.
1983 1216.16 +1233.13 -1225.20 Republican up all year.
1984 1224.38 1206.71 1207.38 Republican down until July and then up.
1985 1334.01 1328.63 1375.57 Republican Up all year.
1986 1898.34 1767.58 1878.37 Republican June-August and August-Sept. twin declines.
1987 2662.95 -2596.28 -1993.53 Republican up until August peak. October was 40% lower.
1988 2032.65 2112.91 2148.65 Republican zig-zag up all year.
1989 2737.27 2692.82 2645.08 Republican up all year except for 10% correction in October.
1990 2614.36 2452.48 2442.33 Republican July peak and 22% decline until October.
1991 3043.60 -3016.77 +3069.10 Republican sidewise except for Feb and Dec rallies.
1992 3257.35 3271.66 3226.28 Republican sidewise for entire year.
1993 3651.25 3555.12 3680.59 Democrat up steadily all year.
1994 3913.42 3843.19 3908.12 Democrat sidewise all year. 10% declines Jan-April and Oct-Nov.
1995 4610.56 +4789.88 -4755.48 Democrat up strongly all year.
1996 5616.21 5883.17 6029.38 Democrat May peak 10% down. July bottom and up.
1997 7622.42 7945.26 7422.08 Democrat July peak 13% decline end in October. Then up.
1998 7539.07 7842.62 8952.10 Democrat July peak and 20% decline end in October. Then up
1999 10829.28 -10336.94 +10729.85 Democrat August peak and 11% decline until October, Then up.
2000 11215.10 10650.92 10971.14 Democrat 17% decline Jan-March and 13% decline August-October. Otherwise sidewise.
2001 9949.75 8847.56 9075.14 Republican May-Sept 30% decline and then rally.
2002 8663.50 7591.93 8397.03 Republican year-long decline ends in October
2003 9415.82 -9275.06 +9801.12 Republican 16% decline Jan-March and then up all year strongly.
2004 10173.92 10080.27 10027.47 Republican gradual decline until October and then up.
2005 10481.60 10568.70 10440.07 Republican sidewise all year. Monor April and October lows.
2006 11381.15 11679.07 12080.73 Republican Shallow DJI decline May-July and then up.
2007 ?????
2008
|
This seasonality is true elsewhere, not just in America.
