Monday, July 01, 2013

Five Years of Solid Correlation: Obama Down, Market Up

I have argued consistently, almost from the very beginning, that Barack Obama would be guaranteed to disappoint the cultists of Hopeandchange, become uniformly and increasingly unpopular and ineffective. I have further argued that, as a result, given Obama's ideological bent, his weakening would be good for the stock market.  I've highlighted this relationship many times throughout the last five years, including graphically.

The Lightworker's re-election notwithstanding, polling has shown a consistent slide in approval from the earliest days of this administration. The guys at Powerline highlight the relevant polling graphs - it's an unambiguous story, and, as they note, an enduring mystery. Recent data shows an accelerating of even this very clear trend, a massive dropoff in approval since re-election. So has the stock market functioned as my theory would have predicted? Definitively, yes. Here is the recent six month chart.
Chart forS&P 500 (^GSPC)
I thoroughly expect that this relationship will hold and extend itself. Expect further Obama weakness and, concomitantly, further market strength.


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