The Presidential Election Year Cycle is an oft-talked about stock market phenomenon, and this week MarketWatch’s Mark Hulbert digs a bit deeper into how it may play out this time around.

According to the PEYC, stocks tend to fare much better in the third year of a president’s term than they do in the other three years — Hulbert says the third-year average is 24.7%, vs. 4.0% for first years, 1.9% for second years, and 3.3% for fourth years. (Hulbert uses post-1945 data, saying that is was only after World War II “that the federal government grew to dominate the economy to anywhere near the extent it does today”. He also uses fiscal years, beginning Oct. 1.)

In his latest column, Hulbert looks at whether mid-term election results — and the gridlock they can cause — affect the PEYC data. His findings: Generally, an increase in gridlock — which Hulbert says is likely to occur following the upcoming mid-term elections — doesn’t negate the third-year boost stocks usually get.

Defining gridlock as anytime that different parties control the presidency and at least one house of Congress, Hulbert says “the presence or absence of gridlock does not appear to have a big impact on the strength of the third-year effect” — even in times when gridlock was not present before the elections, and was present after, which is what Hulbert expects will happen in November.

Hulbert did find one exception, however. Small-cap stocks tend to outperform larger-cap stocks significantly in third years of the cycle. But in third years that featured an increase in gridlock due to mid-term elections, they actually lagged their larger peers.