Hillary’s Hell Week Is Stock Market’s Longest Losing Streak in 36 Years

Saturday, November 5, 2016
By Paul Martin

By David Haggith
TheGreatRecession.info
November 5, 2016

Last week I wrote that election week would be Hell Week all across the United States because of rage and violence and contested election results (regardless of who appears to win). I also warned that the week now past would prove to be a turbulent precursor to the coming chaos. True to that prediction, the week that started appropriately with Halloween turned into Hillary’s own personal Hell Week — a DNC nightmare that spread a chilling fog over the US stock market and gave shudders to the Wall Street and Pennsylvania Avenue establishment.

Falling stock market experiences longest losing streak in 36 years

The S&P 500 and the Nasdaq closed lower on Friday to make nine days of straight decline. The fall has been shallow (only 3% for the S &P), but the run has been long — the longest since December, 1980. The decline is also peculiar in that stock prices have almost always risen in the run-up to an election. The S&P also touched down to its 200-day moving average during the middle of the day Friday before recovering slightly. That is considered a critical red line.

The S&P has experienced similar but shorter declines three times times in the last twenty years, two of which signified major market changes. It did it when Lehman Bros. fell in 2008 and just before Standard & Poor’s downgraded the United State’s credit rating for the first time in history in July and August of 2011, after which the stock market plunged. So, a downhill run this long is associated with a bad turn of events and a market sell-off.

Both of those downhill runs had a steeper fall (29% and 15%). The third time was a spillover from the European crisis, and did not precede a stock-market crisis in the US (only a 9% fall).

There have been eight times when the S&P 500 descended gradually over the course of the three months preceding an election, as it this year. All of those declines were about the size of this one, and in seven out of the eight times, the incumbent party lost the presidency. It’s widely known that, at the end of the day, Americans vote their pocketbooks. Right now, Hillary’s poll numbers are declining faster than the stock market.

If I’m right that the reason the market has been flatlining (with a gradual decline) for months now is that the Fed and/or the US government are buying stocks through proxies to prop it up (see “Is the Fed Fix in for the election?“), then a 3% drop may be more significant than it sounds. If the market persists in falling, despite extraordinary efforts by the establishment to prop it up for the election, that could indicate a market that is so inclined to fall that it keeps slipping even with the price fixing in place.

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