The mid-term rally is one of the most consistent stock market patterns I’ve seen. Amazingly if you look at the S&P500 since the 1950s, your chance of making money was 100% if you follow this strategy. See my previous post where I verified this claim: http://piggington.com/stock_market_rallies_in_mid_term_election_years_2
Quite rightly so, powayseller pointed out that the data set’s not complete because we’ve never had a mid-term year imeediately followed by a recession. I also happen to think there’s a good chance we’ll have a housing-led recession, but what I think will happen is not relevant, at the end of the day I’m hesitatant to go against such a powerful and consistent trend.
For me the ideal scenario is we get a dip into the fall, then the market rally for 6~9 months then get flushed down the toilet in 2007.