Historically, the market is strong the year following midterm elections. This year, though, the S&P 500 index has performed 16% below its average for this period.

In the nine months since last year’s midterm elections, the index has had a 7.1% rate of return, compared with an average annual rate of 23.1%, according to the Bank of America. This is the weakest performance for the S&P 500 in 60 years, when it began being tracked.

Strategists used the idea of the historical market lift to make the case for a bullish outlook, the chief market strategist for the bank’s Investment Strategies Group, Joseph Quinlan, said. “I knew we were down, but I didn’t know we were this far behind,” he said.

One reason the market performs better following midterm elections is because investor confidence is high. There is already familiarity with a president’s policies, and there are no new elections on the horizons, Mr. Quinlan said. In contrast, the first year of a presidency is historically the weakest year for the S&P 500, he said.

This year, the market is bucking the 60-year post-midterm economic trend because of one of the worst housing corrections on record, causing a 1% drop in the growth of the real gross domestic product last year, Mr. Quinlan said.

“More insidious, the housing recession has morphed into something far uglier, with the ongoing subprime debacle in the U.S. threatening to trigger a global credit crunch,” he says in the report titled “Superior Market Returns Following Midterm U.S. Elections? Not This Time.”

Mr. Quinlan said he doesn’t expect a “global financial Armageddon,” but that uncertainty and volatility are likely to continue on for one more quarter.

The greatest gain for the S&P 500 took place in the year after the 1954 mid-term elections, when the index grew 39.4%. President Eisenhower was in office and the Republicans lost a seat in the Senate, giving Democrats control. The Republicans lost 18 seats in the House in a power shift that wouldn’t switch again until 1994.

In order to recover and get in line with the historical average, the S&P 500 would have to increase by 15% in the last three months of the year, an unlikely possibility, Mr. Quinlan said.

Although there are many factors that influence the confidence of investors and market activity, Mr. Quinlan said the connection between election cycles and the economy was “statistically relevant.”

“I listen to these statistics carefully,” he said. “You don’t want to go to the bank on them. You have to always be aware of the known unknowns out there.”

The market may be taking a beating now, but there could be some light at the end of the tunnel, he said. “It could be an indicator that if we don’t get it this year, we could get some big returns early next year,” he said. “If we get through these subprime issues in the next couple months, maybe the payback comes in the first half of 2008.”