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Presidential Cycle overnight perspective

November 6, 2018

The Presidential Cycle is a well-known stock market phenomena. There are 4 years in the cycle:

– Election year

– Post-Election year

– Midterm year

– Pre-Election year

I decided to run a backtest on SPY since its inception in 1993 to see whether this long term seasonality/cycle had an effect on overnight trading.

The answer to this question is yes, as you can see from the sheet above.

I considered trading all nights only during the traditional bullish months for stocks:

January – February – March – April – November – December.

I would say Midterm and Pre-election years to be the 2 best years with above 1,33 profit factor and lower % drawdown. Post election year is acceptable, nearly the same values as Pre-Election year.

It is clear that  Election year is terrible for overnight trading with very low profit factor and very high % drawdown.

Anyway these results are not tradable but they can offer traders an idea of where one of the most famous long-term bias lies.

If you have any questions, please write me at:

Marco Simioni

Nightly Patterns


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