2014 in Charts So Far

August 11, 2014 2:22 PM

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2014 in Charts So Far

They say a picture is worth a thousand words, well, I’m going to test that theory today.  

Here are some charts showing 2014 so far versus what happened various other years.  

Remember what Winston Churchill said, “The farther back you can look, the farther forward you are likely to see.”

First up, here’s the average year for the SPX since 1950.  The average year gains about +9% and tends to start strong, chop around during the summer, and bottom in late October before a strong year-end rally.  Each data point on the chart below presents the average for each day of the year from all the years from 1950 to 2013.  

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Now comparing that to 2014 and after all that has happened so far this year, things are right where the average year is up till this point.  

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This is the second year of the Presidential cycle and historically it has been one of the weaker years in the cycle.  In fact, looking at the chart below, this year is actually negative till late October, before a furious late year rally.  

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Putting this in perspective, this year is actually above average by a good margin.  

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One other way to look at things is this is the 2nd year of the 2nd term for President Obama.  I’ll just call it year six of the Presidential cycle.  

Turns out, these years are extremely bullish, up nearly +23% on average.  Going back to 1950 there have been four - Bush in 2006, Clinton in 1998, Regan in 1986, and Eisenhower in 1958. 

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2014 is running a little weak compared to the average year six of the Presidential cycle, but once again we tend to see a strong late year rally after some summer doldrums.  

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Lastly, here is all the data in one chart.  

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I wouldn’t bet the farm on charts like these, but I’d rather know than not know.  Time and time again last year I’d overlay what happened in 1954 and 1995, and said 2013 could see a huge second half rally as they were all nearly identical.  It is tough to remember, but this time a year ago many were chanting for an ‘87 like crash, not a huge end of year rally.  History might not repeat, but it does rhyme.  To me, the odds favor we finish higher than where we are right now and there’s a good chance for a strong year-end rally.  

Picture courtesy of Chris Morley.  

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