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-- stocks have been searching for direction all day the Dow is like flat unchanged data point that's it -- our next guest thinks.
This whole lot more room to the downside before we see that election inspired rally in September.
Joining us now -- Tom McClellan the publisher of the McClellan -- airport -- it's great to have you you might have heard us teasing you it's just a little bit at the top of the program.
He did you really pinpointing the bottom here -- near term bottom -- August 21 -- -- -- like that.
I would say August 21 to 23 okay typically when you have a Democrat in the book in the White House during an election year you get out of auto a bottom on average on August 21 -- Historically credit.
Yeah we call that the democratic presidential cycle pattern and its well established pattern that -- that the market is correlating really well too.
Right now and so when you see the good correlation you can expect of that correlation will continue.
Unfortunately than the actual markets running about one to two days behind that schedule but it sometimes does so that would I would say August 21 to 23.
Would be a great bottom to jump into a further rally in September and October but between now and then we got some risk.
Yes of the -- question that is what do you think happens from there you think that it rallies after that bottom two what -- -- what would inspire that.
Well I don't really care how far it goes I just want to -- their their market in the right direction when it's moving.
So September and October should be -- months.
Between now and then though the market has an important tasks to do right now there isn't -- hardly any worry out there -- get the -- that fourteen people are not concerned may have forgotten about risk.
The market -- a real good way of making them remember that which is to re induced reintroduce them to the concept of risk with a little scary declined.
Just one or two down days would be enough to get everybody thinking I don't know what's though the world is coming commend the sky is falling.
And once we see them start to think that way.
Then we can get the market start any uptrend like -- -- to.
Tom our politics playing a role in the stock market -- the influencing the direction at all yet.
Or will that come in the weeks leading up to the election in other words we had the big announcement this weekend.
Of Mitt Romney's choice Paul Ryan on the take it.
Not a big market reaction to that is it just yet to come is it you know the Smart money suggesting that -- she noted this is an uphill battle for the Republicans are not gonna get excited quite yet.
We've done a lot of study on that and the general rule is that if the stock market is up during an election year than the incumbent party.
Wins if you haven't -- a decline especially in late October.
And the stock market then the challenger typically -- that's how it's worked for the last three elections 2000 -- -- October.
2004 -- -- -- October -- George W.
Bush won reelection to designate -- remember that that was a horrible September and October so the challenger one.
-- it has worked differently one time in history that was back in 1980 when Ronald Reagan was running against Jimmy Carter and the market was that.
Was up and September and October of 1980.
As the polls were tied it and it ran up into the election.
Because people finally decided that were I Reagan victory wouldn't be a bad thing for the stock market and so I think that it might be that model that we followed this time.
As opposed to the standard model.
An up or down market being good or bad for the incumbent.
So -- doesn't market care winds.
Well the investors think it matters who wins that it turns out that it doesn't matter as much statistically speaking but but the fact the people think that it matters.
-- achieves a self fulfilling.
State of of of of affect on the stock market.
Generally when you have a Republican victory there that investors celebrate all the way up until inauguration day.
-- they realize when he gets crowned as for president that that all of our problems are still here he has magically solve -- Monday and people get depressed again.
I just to do C 2013.
And fourteen as well being -- time for really great potential harm investors' pocketbooks.
And and the and the stock market going down in 2013.
But that's probably have to worry about right now -- right now -- need to catch a bottom later this month are a great two month uptrend and then we can start selling right around election time -- -- to.
I think it on them and so interesting how your plugging history into market performance great stuff force this afternoon and thank you for your time.
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