We are in the midst of the worst two quarters of the 4-year cycle, Q2-3 of the midterm year. So far the three major U.S. equity indices are up about 2-4% for the first two months of Q2, better than average. This is an illustration of the strength of the sixth year of the 4-year cycle, a president’s second midterm year, as compared to the first midterm year. Since 1901 there have been six previous presidents that have served a sixth year. In the chart of the “sixth” of the 4-year cycle we posted last week (http://blog.stocktradersalmanac.com/post/SPY-DIA-Tack-to-Sixth-Year-of-Presidential-Terms-Seasonal-Pattern) you can see less weakness in Q2-3 and a more powerful Q4 rally.
In the table below I have highlighted the worst two quarters and the best three quarters of the 4-year cycle (midterm Q4 & pre-election Q1-2). After some softness over the next few months be ready to capitalize on this 4-Year Cycle Sweet Spot from October 2014 to June 2015.
![[4-Year Cycle Sweet Spot Table]](http://blog.stocktradersalmanac.com/media/image/AIN_0714_20140612_4YrCycleSweetSpot.jpg)
