Market
Could Start 50% Advance
Based On Historical Precedents
Perhaps the most bullish stock market prediction
being made today comes from Yale Hirsch, market historian and
editor of the 2002 Stock Trader's Almanac. His projection
is based on historic cycles. "A hypothetical portfolio of
stocks bought at midterm election-year lows since 1914 has gained
50.2% on average when the market reached its subsequent high
in the following pre-election year," says Hirsch.
He notes that
this persistent four-year market cycle is related to the Presidential
Election Cycle. Stocks climb toward a high as the incumbent administration
pulls out the fiscal and rhetorical stops to make the economy
look good as the election approaches. Market gains from the last
five midterms lows were 65.7%, 81.2%, 34.0%, 45.2%, and 52.5%.
"The recent
bear market, exacerbated by terror attacks on the U.S., has prepared
the ground for a rebound in line with the historical pattern,"
according to Hirsch. If the low in 2002 turns out to be 8000,
a 50% advance could take the Dow (DJI) up 4000 points to 12000
in 2003.
The full record
for this four-year cycle is in the 2002 Stock Trader's Almanac.
This is the 35th edition of that Wall Street perennial, now considered
the standard market data source. Founder Yale Hirsch watches
the market and looks for new patterns from his base in Old Tappan,
NJ.
Among the interesting
discoveries reported in the just-published 2002 Almanac is a
"first-day-of-the-month" phenomenon. Remarkably, during
the last four years the Dow has gained a cumulative 2619 points
on the first trading day of the month. Results from all other
trading days combined show a net loss.
Other new data
reported in the 2002 Stock Trader's Almanac include shifts
in the "January effect" to December, a study of sector
seasonality (semiconductor (SOXX) and retail stocks tend to start
uptrends in November), and emerging NASDAQ (IXIC) patterns. Every
year the Almanac provides comprehensive historical market data
plus month-by-month guidance based on analysis of that information.
Often described
as the "Most Influential Book On Wall Street," the
annual Stock Trader's Almanac is published by the Hirsch
Organization Inc. Just off the press, this perennial favorite
is a combination market encyclopedia, forecasting tool, and stock
market databank. The Almanac also serves as a portfolio record
keeper and daily desk diary.
The Almanac
retails for $34.90 post-paid. It is available at bookstores or
directly from the Hirsch Organization Inc., PO Box 2069, 184
Central Ave, Old Tappan, NJ 07675. Or call 800-477-3400 (ext.
2) 24 hours a day 7 days a week. For further information visit
our website www.stocktradersalmanac.com.
