Midterm-to-presidential seasonal holding window

A fixed November-to-November window

A post-1950 survey of the Dow Jones industrials compared each midterm year's November monthly close with the November monthly close two years later in the presidential-election year. In that sample the later close was higher in every cycle.

The same November-to-November measurement was also applied to earlier twentieth-century cycles running from 1902-04 through 1946-48.

That span is the midterm-to-presidential window: a two-year measurement from the November monthly close of a midterm year to the November monthly close of the next presidential-election year.

One seasonal-trading procedure

A seasonal-trading procedure is a single testable set of entry, exit, and stand-aside rules whose holding period is that November-to-November window.

A 1952-2000 comparison contrasted an October-of-year-two entry held through the election-year close with a January-of-inaugural-year entry held through September of year two.

Editorial reading: those contrast windows show that the archive already isolated different holding spans. The procedure taught here remains the midterm-to-presidential window, not the October or January alternatives.

Presidential-term regime

The presidential-term regime is the four-year political calendar treated as a market-regime scaffold that can place one seasonal hold in a year-two, year-three, or year-four context.

A four-year political-cycle study split the presidential term into 16 three-month segments and described a typical path of first-half election-year softness, second-half strength, then about a year and a half of post-election decline into a mid-second-year low.

A year-by-year breakdown treated January through September of presidential year two as roughly flat since 1933 and located the start of many year-three advances in the fourth quarter of year two. An equity-cycle study covering 1942-44 through 2001-04 placed the average market low about 1.87 years into the presidential term, near mid-October of year two.

Those notes locate the year-two late low: the intra-term cluster in which many historical bottoms arrived near the fourth quarter of the second year of a presidential term.

A regime check before a live signal

Editorial reading: use the finer four-year seasonality as a test of presidential-term regime, not as a second trade. Before the November-to-November hold is treated as a live signal, ask whether the cycle sits in that year-two late-low cluster. If the path still resembles the long post-election decline, the seasonal-trading procedure can stand aside.

Midterm case charts

Weekly Dow Jones industrial charts were used as case studies of the 1994 and 2002 midterm lows, each framed as the start of a multi-year advance.

Cycle notes associated most bear-market starts and ends with the two years after presidential elections and listed midterm-year lows that arrived alongside widely watched social or geopolitical crises. A crisis-coincident bottom is a midterm-year low that historically often arrived while a social or geopolitical scare dominated public attention.

Editorial reading: the 1994 and 2002 charts are case studies of a year-two late low, sometimes arriving as a crisis-coincident bottom. They show how presidential-term regime context can confirm that a midterm-to-presidential window is opening. They do not replace the fixed November-to-November holding period.