Prechter: 2012 Stock Drop Will Guarantee Obama's Ouster Read more: Prechter: 2012 Stock Drop Will Guarantee Obama's Ouster
Dan Weil
Some investment gurus look at elections to determine how the stock market will move. But Robert Prechter, the renowned president of Elliott Wave International, looks at the stock market to see how elections will turn out.
That’s because the stock market’s movements reflect the mood of investors/voters, he tells Yahoo.
"We think the stock market actually is a better predictor of who's going to win the election than the election is of where the stock market is going," Prechter says.
o what does that mean for President Barack Obama?
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President Barack Obama (Getty Images photo) |
"This coming year, if my scenario works out, stocks are likely to be lower. And if that's true, the incumbent is likely to be thrown out, not be reelected," Prechter says.
"A down market is pretty much a guarantee that the current incumbent will not stay in [office]. If it's an up market, and I'm wrong, then he's likely to be reelected."
Stocks are in the midst of a major topping-out process that will probably end around next month, Prechter says. And then it’s a matter of look out below.
"Be safe, be cautious,” he advises.
Not everyone is bearish on stocks for next year. Michael Hartnett, chief equity strategist at Bank of America, sees the Standard & Poor’s 500 Index ending 2012 at 1,350, up 7 percent from Friday's close. He forecasts no U.S. recession and solid corporate profits, The Associated Press reports.