2016 marks Obama’s 8th year in office.
Which means we should have seen this stock market collapse coming.
In a note to clients on Tuesday, J.C. O’Hara, chief market technician at FBN Securities, noted that going back to 1920 the eighth year of a US president’s term has been bad news for stocks.
As O’Hara’s chart shows, the eighth year of a presidential term has seen the Dow fall about 15% on average since 1920. The two most recent examples are 2000 and 2008, which saw the end of the Clinton and Bush 43 years as well as the collapse of the tech bubble and the US housing market.
Of course, years ending in “5” after mid-term elections were supposed to be bullish for stocks, particularly those years that fell during the third year of presidential terms. 2015 saw stocks fall.
Elsewhere in markets, O’Hara notes that market sentiment, market momentum, and the S&P 500’s trend are all deeply negative.
As O’Hara wrote, “The technical landscape of the market is facing the danger of becoming a full blown bear market.”
Near noon on Wednesday stocks were deep in the red.