As The Dow Goes, So Goes Obama?

A study by Socionomics Institute establishes that there is a solid connection between the stock market's direction over three years leading up o Election Day and the final results.

Believe it or not, this study goes back to 1792 when George Washington beat John Adams for his second term. The study concludes that gains of 20% or more in the stock market guarantee re-election and drops of 10% or worse lead to defeat.

For instance,Ronald Reagan saw a 7.2% unemployment rate but a 41% surge in the stock market leading up to his landslide re-election. Bill Clinton said a 63% gain in the stock market prior to his re-election.

When President Obama started office, the Dow was below 8,000 and stands near 13,000 today--that is a 62% gain since he took office. That should guarantee his re-election.

The study does have two cautionary notes. James Madison won re-election in 1812 despite a 34% drop in the stock market. George H.W. Bush lost to Bill Clinton even though the Dow rose 51% during his term.