THE STOCK MARKET (7-31 - 10/31) PREDICTS PRESIDENT WITH 88% ACCURACY

In the interest of equal time.

With the help of friendly Central Banker Ben Bernanke and QEIII, this indicator tilts heavily toward Obama and seems certain to stay that way until early November.

Earlier this year, Sam Stovall, stock market historian and Chief Investment Strategist of S&P Capital IQ wrote about the above in his Standard & Poor's Stovall's Sector Watch, going on to say:

• An S&P 500 price rise from July 31 through October 31 traditionally has predicted the re-election of the incumbent person or party,

• a price decline during this period has pointed to a replacement.

• Since 1948, this election-prognostication technique did an excellent job, in our view, recording an 88% accuracy rate in predicting the re-election of the party in power (it failed in 1968).

• What's more, it recorded an 86% accuracy rate of identifying when the party in power would be replaced (it failed in 1956).

• Therefore, pay attention to the market's performance in the three months leading up to the presidential election, as it will probably do a better job than the plethora of political pundits prognosticating on the presidency."

We're only 15 days into this indicator but, so far, it's pointing to the incumbent. Here's a chart of the S&P 500 since July 31.