Radio Rallies & Reversals

Between a resurface of Ireland's debt woes and North Korea continuing to push the line, not just in nuclear arms, but now in conventional arms with the recent sinking of South Korean navel vessel and now artillery shelling yesterday, the markets are definitely taking pause; but, it's tough to turn the equity markets down between Thanksgiving and Christmas. That jubilant seasonality becomes especially true in mid-term election years, for as the good folks at Bespoke Investment Group note, “The S&P 500’s performance following mid-term elections is quite positive. One year after election day, the S&P 500 averages a gain of 15.8% with positive returns every year (since 1946)!”

Bespoke goes on to comment about comparisons between now and the 1994 stock market environment. While some people might remember the stock market rallying right after the 1994 mid-term elections, the rally didn’t actually begin until mid-December. A more apt comparison might be 1966 when the Democrats lost 48 seats in the House, and three seats in the Senate, leaving the DJIA range-bound between 780 and 824 into year-end before embarking on a rally that would lift the senior index 26.7% from its pre-election low (744.32) in October of 1966 into its September 1967 high.

GB

Read more: http://advisoranalyst.com/glablog/2010/11/23/they/#ixzz16D0nwEbe