“Earlier this year, Professor Robert Prechter, founder of Elliot Wave International, published a study titled Social Mood, Stock Market Performance and U.S. Presidential Elections: A Socionomic Perspective on Voting Results.
Here’s a quick summary of Prechter’s findings:
The results are consistent with socionomic voting theory, which includes the hypotheses that (1) social mood as reflected by the stock market is a more powerful regulator of re-election outcomes than economic variables such as GDP, inflation and unemployment and (2) voters unconsciously credit or blame the leader for their mood.
It’s all pretty intuitive.
However, Prechter’s study did include one interesting nugget of information. Specifically, he found that big moves in the stock market are correlated with “landslide” wins during presidential elections.
“Socionomic theory proposes that more extreme changes in social mood tend to motivate more extreme voting preferences for or against the leader,” wrote Prechter.
From Prechter’s study:”
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