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Midterm election years bring a rally

by Sentimentrader
2026-09-24
Midterm years have historically outperformed other presidential-cycle years after a late-September S&P 500 entry. The advantage appeared before election day and survived nearby entry dates, but 1930 and the deep 2018 drawdown show why a high win rate does not mean low risk.

Key points:

  • Buying in late September and holding 200 trading days has won most of the time.
  • Fix the entry date and the holding period, and midterm years still lead the other three cycle groups.
  • The gap is already there before election day, so election results are not the whole explanation.
  • Start in 1930 instead of 1934 and the perfect record no longer holds.

Strength in midterm years

A widely repeated version of the midterm-year pattern says to buy SPX at the end of September of the midterm year and hold into mid-July of the next year, roughly 200 trading days, and that the win rate is high. We can put that to the test with Backtest-Engine.Click here to see the backtest.

Midterm election years bring a rally

The backtest returns a 100% win rate for this strategy, and looking forward from the entry date the numbers are excellent.

Midterm election years bring a rally

The equity curve rises the whole way.

Midterm years beat other years on

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