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                   TigerSoft Freedom News Service   1/31/2009     www.tigersoft.com   
          
            
                February and March are Bearish Months
         in The Year After A Presidential Election


                                    by William Schmidt, Ph.D. (Columbia University)
                                                       (C) 2009 All rights reserved.  Reproducing any part of this page without
                                                                        giving full acknowledgement is a copyright infringement.


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                     February and March are Bearish Months
         in The Year After A Presidential Election

                                 Breaking the data down for where we are in the 4-year Presidential Election year cycle
                      shows the bearish and bullish political factors more clearly at work on the market.  Just as
                      the incumbent Party may be expected to try hard to stabalize the market in the year before a
                      Presidential Election, it is likely it will make the wrenching changes in the year after the Election
                      and seek to produce a run-up in the stock market in the 2nd and particularly the 3rd year of
                      the cycle.  That certainly emerges from Arthur Merrill's research.

                                By this theory, we should expect Obama to do his "bashing" of Wall Street executives
                      now and blame the Bush Administration for the consequences.  And that is ehat is in the news.
                      See   Obama Blasts Wall Street Bonuses - BusinessWeek   This typically starts after the
                      the Innauguration.  The data show this.  Januaries in the year after a Presidential Election
                      are about as bullish as all Januaries since 1965, 1.5% avg gain versus 1.4%, respectively
                      and showing 70.4% and 67.4% respectively.  But Februaries and Marches in the   Presidential
                      Election year are much worse for stock prices.

                                   Years after A Presidential Election

                                 In 1917, 1921, 1925, 1929...2001 and 2005, Februaries produce avergage DJI declines
                   of 1.4% and rallies only 34.8% of time.  In 7 of these 24 Februaries,  the DJI fell more than 3.4%.
                   When January was down as it was in 2009.  Februaries were twice as likely to decline when
                   January was down. When January was down more than 4%, 1957, 1973 and 1977,
                   February was always down.
  This takes on added significance when we consider that January 2009
                   was down more than any January on record, a whopping 8.8%

                                Marches generally do better than Februaries when all the years since 1965 are considered.
                   But they are distinctly negative in years after a Presidential Election. .While their average change is
                   about zero, these Marches produce gains only 39.1% of the time.  When the previous February was
                   down, which is true 65.2% of the time, Marches were down 10 times and rose only 5 times.


                 All Years      1966-2008
                             Subsequent 21 trading day performance
                               Pct of years Up          Avg. Gain
              Jan                 67.4%                       1.4%
              Feb                53.5%                       0.4%
              March           67.4%                       0.7%
              April              68.2%                       2.3%

              May               43.2%                     -0.1%
              June               52.3%                     -0.3%
              July                51.2%                      0.5%
              Aug                55.8%                    -0.2%
             Sept               34.9%                    -0.6%
              Oct.               58.1%                      0.5%
              Nov.              67.4%                      1.0%
              Dec.              69.8%                       1.8%


                              Years After Presidential Election

                          Jan 31         Feb 28          March 31        April 30         May 31         June 30
      1917             95.40            91.60             96.70             93.20             97.40           95.40
      1921             75.50            75.00             75.80             78.60             73.40           68.70
      1925         123.50           122.20           116.80           120.00          129.90          129.20
      1929          317.50          317.40           308.90           319.30          297.40          331.30
      1933            60.9             51.40            55.40              73.10           90.00             98.10
      1937          184.7            187.20          186.40            174.30         174.70           169.30
      1941         124.1             121.90          122.70            115.50         116.20           123.19
      1945         153.70           160.40          154.10            165.40         168.30           166.20
      1949         179.10           173.10          177.10            174.10         168.40           167.40
      1953         289.90           284.30          279.90            274.80         272.30           268.30
      1957         478.20           464.60          474.80            494.40         504.90           503.30
      1961         648.20           662.00         676.60             678.70         696.70          683.90
      1965         902.90           903.50         889.10             922.30         918.00          868.00
      1969         946.05           905.20         935.50             950.20         937.60          873.20
      1973         992.93           955.10         951.00             921.40         901.40          891.70
      1977         957.53          936.40         919.10             926.90         898.70          916.30
      1981         948.89          974.60       1003.90             997.80         991.80          976.90
      1985       1286.77         1284.01      1266.78           1258.06        1315.41      1335.46
      1989       2258.39        2293.62      2418.80           2480.14        2440.06      2660.66
      1993       3310.03        3370.81      3435.11           3427.55        3527.43      3515.08
      1997       6813.09        6877.74      6583.48           7008.99        7331.04      7672.79
      2001    10887.36      10485.28      9878.78          10734.97     10911.94     10502.40
      2005    10489.94      10766.23    10503.76          10192.51     10467.48     10274.67
      2009      8000.86
                                                            Jan 31-March 31                                      March 31-June 30
                                                             8 up                                                          14 up
                                                            15 down                                                     9 down
        
         Year After Presidential Election Year
                 Month By Month Pct Gains


                                                    January                            February                              March                           April                  May                  June
                   12/31                  1/31          Gain                     2/28           Gain                   3/31                                      4/30                    5/31                  6/30
1917    74.40     95.40 +28.2%     91.60 (-4.0%)    96.70 +6.3%       93.20     97.40     95.40
1921    72.00     75.50 +4.9%      75.00 (-0.6%)    75.80 (-0.7%)     78.60     73.40     68.70
1925   120.5     123.50 +2.5%     122.20 (-1.1%)   116.80 (-4.4%)    120.00    129.90    129.20
1929   300.00    317.50 +5.8%     317.40 (-0.0%)   308.90 (-2.7%)    319.30    297.40    331.30
1933    60.3      60.9  +1.0%      51.40 (-15.6%)   55.40 +7.8%       73.10     90.00     98.10
1937   179.9     184.7  +2.7%     187.20  +1.4%    186.40 (-4.3%)    174.30    174.70    169.30
1941   131.1     124.1  +5.3%     121.90 (-1.8%)   122.70 (-0.7%)    115.50    116.20    123.19
1945   151.90    153.70 +1.2%     160.40  +4.4%    154.10 (-3.9%)    165.40    168.30    166.20
1949   177.30    179.10 +0.5%     173.10 (-3.4%)   177.10 +2.3%      174.10    168.40    167.40
1953   291.90    289.90 (-0.4%)   284.30 (-1.9%)   279.90 (-1.5%)    274.80    272.30    268.30
1957   499.50    478.20 (-4.3%)   464.60 (-2.8%)   474.80 +2.2%      494.40    504.90    503.30
1961   615.90    648.20 +5.2%     662.00  +2.1%    676.60 +2.2%      678.70    696.70    683.90
1965   874.10    902.90 +3.3%     903.50  +0.1%    889.10 (-1.6%)    922.30    918.00    868.00
1969   943.75    946.05 +2.4%     905.20 (-4.3%)   935.50 +3.3%      950.20    937.60    873.20
1973  1034.02    992.93 (-4.0%)   955.10 (-3.8%)   951.00 (-4.3%)    921.40    901.40    891.70
1977  1004.65    957.53 (-4.7%)   936.40 (-2.2%)   919.10 (-1.8%)    926.90    898.70    916.30
1981   963.99    948.89 (-1.6%)   974.60  +2.7%   1003.90 +3.0%      997.80    991.80    976.90
1985  1211.57   1286.77 +6.2%    1284.01 (-0.2%)  1266.78 (-1.3%)   1258.06   1315.41   1335.46
1989  2168.57   2258.39 +4.1%    2293.62  +1.6%   2418.80 +5.5%     2480.14   2440.06   2660.66
1993  3301.11   3310.03 +0.3%    3370.81  +1.8%   3435.11 +1.9%     3427.55   3527.43   3515.08
1997  6448.27   6813.09 +5.7     6877.74 (-4.3%)  6583.48 (-4.3%)   7008.99   7331.04   7672.79
2001 10786.85  10887.36 +0.9%   10485.28 (-3.7%)  9878.78 (-5.8%   10734.97  10911.94  10502.40
2005 10783.08  10489.94(-2.7%)  10766.23  +2.6%  10503.76 (-2.7%)  10192.51  10467.48  10274.67
2009  8776.39   8000.86(-8.8%)
================================================================================================
                n=24            n=23             n=23               n=23         n=23       n=23 
                17 up 70.4%     8 up 34.8%       9 up 39.1%       13up 56.5%  13up 56.5%   8 up 34.5%  
                7 down          15 down          14 down           10 down    10 down      15 down 
                avg = +1.5%     avg = -1.4%      avg = 0.0%
     
                     
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