In a previous blog post we saw that while the UK market usually increases steadily throughout the month of November, the behaviour in US election years is different. As noted in the previous post, in US election years the UK market in November has displayed-
early enthusiam in the first couple of days has given way to a sell-off until a rally in the final week of the month.
and the average chart for the month in US election years is quite different to the chart for non-eleciton years.
The chart for November in US election years is reproduced below, but this is overlaid with the actual UK market performance (dark red line) this November 2012.
As can be seen, the market performed quite closely to the historical average: increasing in the first few days, then selling off, and ending with a rally to the end of the month.