Feb 4 - Stock Market Predicts Defeat For President Obama

It's happened 13 times since 1936. Call it the IBD January Incumbent Barometer.

An incumbent president faces a challenger ... and 13 out of 13 times the stock market picks the winner in January.

Say again?

Here's how it works: When the stock market scores a big gain in January — about 6% or more — the challenger beats the incumbent president every time, or as we shall see, almost every time. When the stock market goes up or down modestly in January — 4% or less in either direction — the incumbent wins almost every time.

This January the Nasdaq rose 8%, signaling a loss for President Obama, according to the IBD JIB.

You can write this off as wishful thinking by Obama's critics, fearful thinking by his supporters, a silly ham-on-wry exercise, or just a coincidence emerging from data mining.

But just as the January barometer for stocks supposedly signals the market's direction for the year, this political January barometer does the same for incumbent presidents with one catch.

The January barometer for stocks has sometimes been wrong. The last time the JIB missed was 1932. Since then, the JIB has been on a roll. Consider the record:

Nasdaq up 5.8% in January 1992, and challenger Clinton wins in November.

Nasdaq up 7% in January 1980, and challenger Reagan wins.

S&P 500 up 11.8% in January 1976, and challenger Carter wins.

In all three cases, the electorate was pining for a change, whether the aftermath of Watergate, the dismal economy of the late 1970s or President George H.W. Bush's failure to keep his "read my lips, no new taxes" promise.

Indeed, the stock market typically looks ahead and reacts before headlines become reality. So there may be more at work than an uncanny streak.

The JIB has been just as good with incumbent victories. In January 2004, the Nasdaq rose 3.1% and Bush won in November. (See table for the complete tally.)

The more modest moves in January signaled an incumbent victory. The big up moves in January signaled a challenger victory.

The exception was 1932. The Dow fell 1.7%, a modest move which should've been good for incumbent Herbert Hoover, according to the JIB. But FDR, the challenger, won.

If Obama is re-elected, he will be the first to beat the JIB since that Great Depression election. But if the JIB performs in its usual near-perfect fashion, look for a Republican victory in November.

IBD January Incumbent Barometer: Stock Market Calls Every Incumbent Election Since 1936 - Investors.com

Doubt republicans win. If they had someone like Christie running I'd say maybe.

difference this time is most people know that Obama couldn't turn Bushes !!ery around in 1 term

This

Those Roosevelt wins shouldn't even count, the country was at the brink of war or at war so the fact that he even served three times was a special case. It would've been stupid to change leadership in the middle of such a huge conflict. Johnson won because he was praised for succeeding JFK, so that was a no-brainer. This !! is too easy to dissect, GG though. And then they use different indices to correlate their "findings". BS, get mad that Obama will likely win again.

What type of stupid as$ pattern uses a bunch of different indexes....this article can't get much dumber....

I want what this guy is smoking.

It's slowly regaining a positive trend but bouncing back in a big way? Who are you Obama's campaign representative?

Mitt is too wooden and unlikeable and Newt is just a ticking time b0mb, Paul is "too radical" for the est@blishment and Obama is looked at as a cooler, hip version of Jimmy Carter (nice guy but terrible at his job.)

It's gonna be a close one... Repubs. are gonna vote their guy regardless of who it is. Romney's main theme is "electability" for god's sake... how crazy is that? Dems are gonna vote their guy because the Left wingers are completely brain washed by now to think anyone who's not a Dem is the devil.

This is gonna come down to the Independents and it's too !!ing close to call IMO. The GOP is in trouble because their candidates other than Paul - no one likes. If Chris Christie were to run or Rubio or one of those GOP guys then hands down they'd win the election by a land slide but they're the future of the GOP not the present (although either is likely to be VP if the Rep. candidate wins the election.)

THE BIGGEST problem with this index prediction is that it switches from the Nasdaq to the Dow to the S&P 500... this is a classic move by a "poll" or any kind of prediction based article. It conveniently runs with a different sign of the Market to fit it's theory. In that same year the Nasdaq was up above 4%... was the Dow? was the S&P 500? See my point? It's completely flawed and agenda driven.