With the opinion polls calling the presidential election a pick 'em, prognosticators have eagerly sought other reliable crystal balls
One forecasting tool is the economy, and the stock market in particular. As goes the Dow, so goes the election, or so the theory goes.
In some sense, it's true. For the 11 contests since 1960, the Dow Jones Industrial Average has been up in the three months prior to Election Day seven times, and down four times. When it's up, the incumbent candidate or party has tended to win (five times out of seven).
When the Dow has been down in the final three months, the challenger has won all four times!
Dow last 3 months
August 2, 2004 Dow Jones close 10,179
October 30, 2004 Dow Jones close 10,027
DOWN 2.7%
Dow in 2004
January 2, 2004 Dow Jones close 10,410
October 30, 2004 Dow Jones close 10,027
DOWN 4.4%
Dow During Bush Presidency
January 22, 2001 Dow Jones close 10,578
October 30, 2004 Dow Jones close 10,027
DOWN 5.2%
Based on historical data for the last 11 Presidential Elections, the Dow Jones market prediction is a victory for John Kerry!