Presidential Cycle: Third-Year Correction

The "Contrary Investor" provided the following data on the third-year corrections from market highs to market lows for Presidential Cycles; which is very informative, given the current market conditions and, of course, we are in that third-year cycle now.

The corrections during the third-year of the Presidential Cycle had a mean and median declines of 9.8% and 9.2%, respectively, for the S&P 500. If we look at the current declines from the market highs of July 19 to the current lows of August 16, we have the DJIA down 11.79%, S&P 500 down 11.87%, NASDAQ down 12.41%, and the Wilshire 5000 down 12.4%. These declines are all within the parameters for the third-year Presidential Cycle declines and the normal corrections within a bull market. Therefore, as long as the "critical-mass levels," which were mentioned in the previous post hold and the 17-week EMA holds above the 43-week EMA, the bull market remains as such.