Tags: Prechter | stocks | drop | Obama

Elliott Wave’s Prechter: Continued Stock Plunge Would be Fatal for Obama

By    |   Thursday, 28 June 2012 02:52 PM

A decline in U.S. stocks heading into the U.S. election would probably spell doom for President Barack Obama’s re-election chances, says Robert Prechter, founder of Elliott Wave International.

His study of election results for more than 100 years shows that stock market trends almost always have predicted presidential election outcomes.

Over the last one-, two-, three-, and four-year periods, stocks have gained. So, “the odds would be that Obama would be re-elected if the election was held today,” Prechter tells Yahoo.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

“But it’s long time until the election. Most of my indicators aren’t very positive for the stock market. . . . Odds are the stock market is going to go lower between now and Election Day.”

At the moment, there’s a gap between investor perception and reality, Prechter says. “The economy is doing a lot worse than before, but the stock market has yet to cave in.”

At some point perception will come to match that reality, and the optimism will fade, Prechter says. If that happens before Election Day, Obama better watch out, he maintains.

It’s interesting that Prechter’s comments come the same day as the Supreme Court’s ruling to uphold the healthcare reform law.

Some in the political class say that decision will go a long way in determining the election, and they are mixed as to whether the justices have sealed Obama’s victory or his demise.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

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