If stocks rise in that critical three-month stretch, it favors the incumbent party (i.e. Hillary Clinton/Democrats) because investors seem happy and bullish. If stocks lose, the opposition party (i.e. Trump/Republicans) usually wins.
In a very good sign for Trump, the S&P 500 (the broadest U.S. stock market gauge) has fallen about 2% since August 1.
"I remind investors that these type of studies should be viewed as a guide and never gospel," Stovall told CNNMoney. Since 1944, there have been 18 presidential elections. Stovall's metric has correctly predicted all but three of them.
There's another catch: Some of the other market indicators CNNMoney has been following point to a Hillary Clinton win.
Moody's Analytics has its own model to predict who will end up in the White House based on how the economy is doing. It has correctly predicted the winner every election since 1980.
This year, the model points to a solid Clinton win. Why? It's because the U.S. economy is relatively healthy (there was more good news Friday as growth jumped).
President Obama's strong approval rating also helps Clinton (it's now at 55% -- the highest point in his second term) and is a factor in the model.
Wall Street is also closely following the latest news. The "October surprise" on Friday that the FBI found new emails from Clinton aide Huma Abedin that passed through the private Clinton email server caused markets to sink briefly. Investors strongly prefer a Clinton win.
"This week's set of important U.S. economic indicators may take a back seat to the concerns over the U.S. election," wrote Wells Fargo senior economist Sam Bullard in his weekly note.
Gold also points to a Clinton triumph. Typically, investors buy gold when they're nervous. But since the first debate, more people have been selling gold than buying it.
The price is down over 3% in the past month. It fell below the key $1,300 an ounce price in early October and hasn't come back near that since.
After the shocking news on Friday, gold did bounce up Friday. But it's not moving much Monday as investors seem to believe Clinton is still on track to win Election 2016.
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