This market is the worst it's been since 2002. Or maybe 1998. 1994 was pretty bad too. Naw, it wasn't as bad as 1990. Do we see a pattern here? Of course we do. It's the four-year cycle, a.k.a., the Presidential Cycle.

Several subscribers called to ask why I said that 2006 would be a rough year for stock prices until October or November; then the market would blast-off with a rally lasting until January 2008. Well, I'm not a forecaster, nor a prophet, but I have learned and experienced enough about the Presidential Cycle to be convinced it works. As noted in my essay of 12/30/05, this phenomenon is described in Chapter 19 of my book, "Stocks, Strategies and Common Sense," and also has been cited in numerous essays over the years. To find these essays, simply click on "Views," then "VectorVest Views," then "Search Views," type Presidential in the text box and click on "Search" at the bottom of your screen.

So what is it that makes the Presidential Cycle so powerful? It's simply the overwhelming desire of an incumbent political party to hold office. Nothing helps a party get re-elected more than a strong economy and lots of jobs. Knowing this, the party in power will do and spend what ever it takes to create jobs. But, but, but, the economy is slowing down right now, so how are they going to turn the economy around? Easy. The politicians will spend money like hell won't have it, and The Fed will lower interest rates.

Everything appears to be on schedule. The economy is beginning to show signs of weakness and good old Uncle Ben is fixing to take at least one more shot of raising interest rates. This move will infuriate stock investors, causing stock prices to tank lower sometime in October or November. Then good old Uncle Ben will lower interest rates and the bulls will stampede again.

Ah, there's nothing like The Presidential Cycle.