While I am not in the forecasting business, I have faith in the Presidential Cycle and I have gone on record many times, having said so. For example, I cited this phenomenon in my essays of 12/30/05 and 12/29/06 in which I discussed "The Year Ahead" for the stock market.

In my 12/29/06 essay, I elaborated on my comments of 12/30/05 in which I said "the first two years of a President's term usually are not good for stock prices, but the last two years usually are outstanding." This meant that one should have logically expected above average stock market performance in 2007 and 2008, the last two years of President Bush's term in office. In my book, "Stocks, Strategies & Common Sense," I quoted Mr. Richard Stoken who said, "The really juicy part of the election cycle is the fifteen month period beginning in early October, two years before the election, and lasting until early January of the election year." This meant that the "really juicy period" started in October 2006 and would end in January 2008.

So I had no trouble saying that 2007 would end with a rally even though I thought it would have a correction beforehand. Now, here we are in September 2007, the market is in rally mode and we still have four "really juicy" months left to go in the election cycle. Do I still expect prices to rally right into January 2008? Yes, of course I do. That's fine, but what about the weak dollar, the credit crunch, high oil prices, weak home sales, tapped-out consumers, job lay-offs and whatever?

Forget about it. When interest rates go down and earnings go up, stock prices go up. Am I sure about that? Yes, I am, but there are no guarantees. It really doesn't matter, anyway. VectorVest will guide us in the right direction, whatever stock prices do. In any event, it's nice to have a bullish outlook on Where The Market's Heading.