The S&P 500 closed October at 5,705.45, up 185.15 points from its July settlement. According to research, this is a good indicator of the outcome of the next US presidential election.
However, October's close was below the September settlement of 5,762.48, completing a long-term bearish spike reversal on the indexes monthly chart.
This means the long-term trend has turned down at a time when seasonal analysis tells us the index tends to move higher.
Well, the verdict is in, at least as far as one indicator is concerned. Recall the piece I posted on August 3 that talked about how LRL Financial has connected the dots between the S&P 500 Index ($INX) and the next US presidential election. This group’s research shows that since 1984, if the index closes higher the last trading session of October than the last trading session of July, the party occupying the White House stays in the White House. On the other hand, if the index is lower for that three-month period the opposing party settles into the Oval Office. If we want to go back further than 1984, the group’s research shows “the S&P has correctly predicted the winner 87% of the time” dating back to 1928. For the record, if we go back to 2020 we see the S&P was down 1.16 points from the end of July through the end of October[i]. We all know what happened when the votes were counted.
