Price-Time Review: Four Year Cycle, Presidential Cycle, History--updated 8

FOUR (4) YEAR--"PRESIDENTIAL"--CYCLE OVERVIEW and HISTORY
1896 to 2006 and projected out to 2010-2014.
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copyright(c) 2006-7 Price-Time Review LLC

Ok, here is a BIG CYCLE "FREE BEE" for the road...from what we absolutely DO KNOW about Stock Market Cycles in the U.S. and do not have to "speculate about":

1) The <4-Year "Presidential" Cycle> is, without any doubt, one of the six (6) Key Stock Cycles in the U.S.

<SUBSCRIBERS ONLY--(6) Key Cycles in U.S. Stocks: List and Charts>

2) It has been in existence for at least the last one hundred years, and IN ALL LIKELIHOOD it will be in existence for the next 100 years.

Needless to say, this is absolutely rational and logical SINCE: as long as the U.S has key elections for it's president, AND a large portion of the congress, every four years THEN this cycle not only "should exist" and "does exist," but will continue to exist.

In addition, as long as those elections take place every four years--AND their outcomes still have a "major influence" on the future direction of investments in this country--that cycle will remain as ONE OF the key "influences" on stock prices.

Just keep in mind that all KEY CYCLES are still only ONE of the FIVE "major influences" that are ATTEMPTING to INFLUENCE those stock prices--or index values--at any given time.

Therefore, this cycles "net influence," on the charts themselves, can show up as anything from a minor "consolidation" to an all out crash down--for a low--or anything from a weak "round over" to a major spike up--for a high.

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3) While there are still a few professionals, a very few, who "think" and espouse their thesis that this key "4-Year Cycle is now either "dead" or going to come in very, very, late, like some seem to think it did in back in 1986 into 10/1987, that is actually one of the more ridiculous assertions that I have ever run into...which is also quite a feat.

That is to say, and in no uncertain terms, this "key cycle" has ABSOLUTELY NOT "gone away," since no TRUE Stock Cycle can ever miss, skip, or "disappear"; AS LONG AS, it's "underlying" reason for existing has not "disappeared."

Of course, in the case of the 4-Year Cycle, since we still have U.S. "Presidential" elections every four years THEN this cycle will be around and have AT LEAST some "INFLUENCE" on the stock indices "price," or "index values," at it's next fully expected low...AND at it's NOT SO fully expected high.

AS of this writing, early May of 2007, that "not so fully expected HIGH," which is a lot closer than many expect, is fully identified in both our Weekly Forecasting Service --the Price-Time Review--and our Pattern Trader's E-Book

4) While it may SEEM to some traders and investors AS THOUGH the "fully expected" 4-Year Cycle low for October 2006 did not materialize at all, that is NOT THE CASE.

While the cycle "clearly" DID NOT arrive EXACTLY on time, in October of 2006 of course, or at least did not arrive "on time" and with a enough "influence" to overcome the other very bullish "influences" present at the time, it actually DID ARRIVE, "a little" EARLY," between 7/18/06 to 8/12/06.

While even few seasoned traders realized it at the time, myself included, the U.S. FED's rate "pause" on 8/10/2006 was "perfectly" engineered, and delivered "exactly" on time, to prevent, or diminish, the effects of that "fully expected influence" from a "fully expected" 4-Year Cycle low...for October of 2006.

Needless to say, that is a "near re-run" of what happened in the summer and fall of 1986--another historic period for a "fully expected" 4-Year Cycle low. As some may recall, the Bull Herd celebrated that "early sneak out" all the way up into a 10/19/1987 mega crash...on "Black Monday."

While no one can predict a "full re-run" of the 1986-87 period here for 2006-7, I "highly suspect" that some Big Dogs will be. In addition, and needless to say, if enough of them Big Dogs do "assume" a re-run of 1986-1987 period then the probability of that happening could become very high.

BY THE WAY, the 1987 "crash" was NOT a 4-Year Cycle low, and those who think so need to re-read the top two paragraphs of this post. That is to say, THE actual 4-Year low came in September of 1986, as fully expected, but once again it was "a little early" AND had only a "weak influence" on the indexes.

Looking back at that 1986 data for the DOW, we can clearly see that the technical reason for that "weak" cycle low was that the the correction down into it occurred in two separate, and weaker, moves...an A-B-C correction in Ewave terms where the actual price low--or index low in the case of DOW--was made on the A wave down, on 8/4/1986, and the final C wave low was a "higher low"...made on 9/28/1986.

If you check the actual DOW chart data back in 1986, you will see that it made a high on 7/2/86 at 1,922, a first low at 1,730 on 8/4/86 (near a 10% drop), a "reflex rally" top AND a "irregular" new high on 9/5/86 at 1,933, and a final low (C of that quick A-B-C down) on 9/28/06 at 1,733. That 9/28/1986 low was a full "retest" of the 8/4/1986 low AND a "successful" higher-low...even if by only 3 points.

Looking back to that time period now, it is easy to see why this important cycle was "washed out," or "sneaked out early," by the other four (of five) "key influences" for stock prices.

As one example, in 1986 the economy had just exited a major economic recession in 1981-1983, which was actually a full blown depression in the East and Mid-West, AND interest rates had just "plunged" from their 15%-17% high in 1981 to 6%-7% in 1984-1985. Needless to say, with that massive drop in rates from 1981-85 the U.S. economy was in a full blown up-swing by 1986.

In addition, with Reagan still in the White House, after having been RE-ELECTED in 2004 (Oops--I mean 1984!), then the business and financial communities knew they had one of the most prolific free spenders in the history of American politics in place...for a least the next two years!

With those kind of "basic fundamentals" firmly in place, it's easy to see why the Presidential, 4Year, Cycle in the late summer and fall of 1986 made such a "weak" influence where it actually "marked the charts."

Needless to say, those OTHER INFLUENCES were not nearly as strong in 1970-1974-1978-1982--1990-1994-1998-2002 as they were and 1986, and that is exactly why this KEY CYCLE, and its major influence on stock prices, DID "mark" the charts in those years..."much more clearly" then in 1986.

By the way, in 1994 there was also a "weak" MARK on the index charts from that 4-Year Cycle, and it is my opinion that at least one of the reasons the "correction" down into the October 1994 low was also "weak" is because there was very little reason to correct that long, and slow, "recovery" up from the 9/1990 low.

As many will recall, or at least many old hands, the DOW's top in early 1994 was at "about" 3,900, and that was only 1,500 points above the 2,430 low made on 9/23/1990. Therefore, that long and slow "recovery rally," over the following four years from 1990 to 1994, left only, "about," a 60% rally over four years TO BE CORRECTED.

While I'll not get into it here, one of the BASIC TECHNICAL AXIOMS of stock market trading is: "the bigger the rally the bigger the correction AND the bigger the correction the bigger the rally."

As I just stated, in the fall of 1994 there was "very little" that needed to be "corrected" for that prior rally, and this KEY CYCLE'S "weak influence" at MARKING the CHARTS in the fall of 1994 was very logical.

As you might expect, while I can clearly see the bullish reasons for 1986's "weak" 4-Year Cycle "MARK on the charts," and 1994's, last years "blow-out," OR "sneak out," is a lot harder to "understand"; eventhough, some of the OTHER KEY INFLUENCES that worked to prevent a major MARK in 1986, and 1994, also existed in AUG. to OCT. of 2006.

Some of those reasons and OTHER INFLUENCES will be discussed below...for those interested in my "play by play" account--AND OPINION--for many of 4-Year Cycle lows during the last one hundred years.

JUST REMEMBER: As a BASIC AXIOM of STOCK CYCLES: "A Key U.S. Cycle will never miss-skip-or terminate UNLESS the underlying basis for its existence is either terminated OR materially alterated"...so as to dramatically reduce it's INFLUENCE on investments in the U.S.

Needless to say, NEITHER a termination or material alteration did OCCURRED to the key U.S. 4-YEAR "Presidential" CYCLE in 2006...and is extremely unlikely to occur in the foreseeable future.

Therefore: Continue to LOOK to the future "fully expected lows," and the not so "fully expected highs," for this key stock cycle as important "periods in time" to watch closely for a change in trend (CIT)...whether it be a major CIT or something "weaker."

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BELOW IS "MY"--PLAY BY PLAY RECOUNT--of the prior historic 4-Year Cycle lows going back to 1934. While the mega bullishness during the 1920's seemed to have completely overpowered the "influence" from the 4-year Cycle on the market indices themselves, the period before the Roaring Twenties--1896 to 1920--also have a "good" correlation to this cycle. In addition, we note that the period after the Great Depression had a very strong correlation to it.

1932-34: A spike low for U.S. stock prices was made in June of 1932 for most U.S. indexes, but not the Transports. In my opinion this was only the first leg down into the next 4-Year Cycle low, made in 1934--as a higher low--and dead center the Great Depression's economic low.

1938: Stocks rallied up off the 1932 spike low AND the 1934 "retest" of that low, at the 4-Year Cycle "trough" in the fall of 1934, to a "rebound high" at DOW 203 in 1937. From that high, the DOW tanked it right down to the next "fully expected" 4-Year Cycle trough...in the spring ,summer, and fall of 1938.

Once again, that cycle low made a price low on the first leg down, at 97 on 3/31/1938, and then made a higher low "retest" on the 3rd leg down...at 127 on 9/28/1938.

1942: The advance up from the 1938 low made a high in 1940 at 139. From that high, the Dow then went into a long and slow decline down into a fully engineered low made in the spring of 1942--AFTER the U.S. entered WWII in December 1941.

The 4/42' low was @ 92, followed by a reflex high at 109 in 7/42, and then another lame--higher low-retest made on 9/11/42 at 106...a 34% correction to the "absolute value" of the 1940 high. NOTE that in 1940, F.D.R. became this country's only three term president.

ALSO note that at this point, I'm giving those corrections in "absolute percentage terms" from high to low...which is from the prior wave's (bull leg up) high to the "actual" correction low...be it a 4-Year Cycle low or not; eventhough, "most 4-Year Cycle lows are also major wave pattern lows"!

Needless to say, in modern day trading terms the "correction" percentage is based on a correction's decline IN RELATION to the prior rally's advance, not in relation to its prior absolute highs or lows...as if anyone much cares!

For example, from the 1938 low--@ 97--to the 1940 high--@139--the DOW gained 42 index points, and the correction that followed that two year rally up was from 1940--@ 139--to 4/1942--@ 92. This is actually a 100% correction over what was just a little more than one year.

By the way, IF you look back at the 1920 to 1929 "bull market," you will see that the 1929-1932 "crash" ALSO made a 100% correction--over 30 months--from the 1920 low @ 41 to 383 in 1929 and back to 41 again in 1932.

I'm just wondering why no one calls the 1940 to 1942 "correction" a crash?

Hum?

Any way, now moving on.

1946: This year was the start of a "typical" post war recession--that actually was the start of a larger "double dip" recession between 1946 and 1949-50 for the economy. The 1946 high--up from 1942's low--reached 213 in 5/1946, and the first low was at 164 on 9/19/46'...with the final low made on 10/30/46' at 160 (a -25% correction over just five months!)

1949-50: This period saw a "second dip down" from the post war "fall out," from WWII, and it was where stock prices actually made their lowest low in 1949...not 1950. I guess, we could look to this period as another SKIP or SNEAK OUT, and that would support the bullish case for 1986 and 2006...at least for the not to distant future.

1954: This period saw yet another weak, and "running," correction made inside a very strong bull market. In my opinion, this was WAVE III in Ewave terms, and "typically" the MOST BULLISH of all waves; eventhough, the current long wave up from 1974-1982 could be a "5th wave extension," which are many times just as powerful and dynamic as a 3rd wave...or sometimes even exceed the power of 3rd wave up.

1958: Was another weak correction as "other bullish-influences" were extremely strong, and it was "fully expected" that President Eisenhower would "have to" continue military spending levels due to the "Cold" War, and Space Race, in progress.

1962: What seemed to be another "somewhat weak" contraction during the summer and fall of 1962, was actually a "fairly nasty"--BUT QUICK-- correction that knocked 25% off the DOW over a five month period.

Once again, the net depth of this correction--AND IT'S TIMING--was masked by another sequence of dip down, reflex rally right back up, and then a higher low for the final dip, and "successful retest" of the first dip.

NOTE that the high before this cycle low was made as a string of tops along the line of DOW 741, in late 1961, to DOW 727 on 3/16/1962. Then the first dip low was made on 5/24/62' at 524, a 26% hair cut in just three months, followed by a weak reflex rally back up to only 622 on 8/23/1962, and then the final dip down--and successful retest of the first low--came in at Dow 549, and EXACTLY ON TIME...October 24, 1962.

ALSO NOTE, the Cuban Missile Crisis began on October 12, 1962.

HUM?

ANYONE NOTICE how "bad things" always, or nearly always, seem to happen right at, just before, or right after the "fully expected" 4-Year Cycle low?

DOUBLE HUM?

1966: While the J.F.K.'s assignation in 1963, and Johnson's election in 1964, seem to be a period of indecision, a "serious" market dip in the spring-summer-fall of 1966 clearly "marks the charts," with a near 25% loss between a DOW high of 1001 on 2/9/1966 and the "final" LOWER LOW made on 10/10/1996 @ DOW 735.

The successful retest of the 10/10/1996 low, as a higher low, was made on 12/30/1996 @ 776.

This 4-Year Cycle low in 1996--once again exactly on time--is "eventually" shown to be the first of many warning shots across the bow for Mr. Bull Market...so to speak. However, with the Viet Nam war in full swing not even the totally drunk are willing to leave the party early.

ALSO NOTE that, as it stands now, the DOW's top made at 1001, on 2/1966, is one of the PRIME TARGETS for the whole bull market up from the 1932-34-38-42 lows; eventhough, the 1968-69 and 1973 highs are also TARGETS for that bull high.

1968: Johnson fails to run for re-election and Richard--"Tricky Dick"--Nixon is elected with a mandate to "end the war"...of course he only "escalates the war" and THE BULL PARTY is back on.

1970: Even with THE WAR still raging in View Nam, and the U.S. spending money hand over fist, the Home Boyz can already see the hand writing on the wall...for the "not to distant future." The economy makes its first of what will become a "string" of four recessions...between 1970 and 1982.

Note that the 4-Year Cycle low in 1970 was actually made on 5/26/1970, at DOW 627, and the only retest of that low came on 7/7/1970 at DOW 665. In addition, by the fall of 1970 the DOW never looked back and was "blowing and going" on it's way to RETEST the 1001 high made in 1966. However, it did not reach that level until the very end of 1972; with the ultimate "reflex rally" high being made on 1/11/1973...at 1067.

Therefore, looking back on the 1970 low, we can see that is was "about" a 20% to 25% hair cut...depending on whether you judge the prior high as 1001 in 1966 or "about" 900-950 in 1968-69. One way or the other, it was CLEARLY an EARLY SNEAK OUT for the 4-Year Cycle.

1974: With Nixon now impeached and the "bullish" WAR over, the typical post war recession--and the stock market bear decline to predict it--hits home.

The DOW losses "nearly" 50% of it absolute value--from 1,023 in 73' to a 570 low in 1974-- before the "1st" bounce back up carries the DOW back to a triple top--along 1,000--in 1976...even without the "aid" of new war I might add.

The major low in 1974, which "may" end up being the Dow's Bear Market low for that period, was made as a "final lower low," at 570 on 12/19/1974, to a 573 first dip low made on 10/4/1974...and dead center another "fully expected" 4-year Cycle lows.

1978: Jimmy Carter takes over from Ford in 1976 and a "very typical" first term mini recession hits home in 1978...as fully expected!

FOR this 1978 cycle low, the first dip down, at 740 on 3/6/1978, was the Dow's actual index low for 1978, and the only retest of that low was made way out in November and December, of 1978, at DOW 789 and 781.

A SIDE NOTE HERE: With the war ending in 1973, the market topped and went into a mega decline when oil prices sky rocketed. While few traders , and even fewer investors, realize what occurred back in that 1972-1974-1982 period, it was "actually" Nixon's "ATTEMPT" to transfer the cost of the Viet Nam war to the oil producing countries--by taking the U.S. off the Gold Standard and devaluing the American IOU's they where holding--that triggered the OIL EMBARGO...and the massive hyper inflation of the mid 1970's to early 1980's.

I guess that someone forgot to teach Nixon's economic advisors that a "planned devaluation" only works on those who: "DO NOT HOLD A MONOPOLY on something you need." HUM?

Of course, by 1980 the home fokes had blamed Jimmy Carter for the Nixon-Ford devaluation, and he became their GOAT in the 1980 elections.
:
1982: Even with Carter gone and the "renewed prospects" for a new, and bullish, WAR to drive stocks higher, the over hang from the View Nam war and Nixon's handy work--to take the U.S. off the Gold Standard in 1972--"finally" HITS HOME with a vengence...as 1981-82 produces the deepest recession since the Great Depression; eventhough, only 1/2 the country--Mid West and East mostly-- "suffers" this time around.

The 1982 low was another 4-Year Cycle low, and another "double dipper," with the final DOW low being a lower low, made on 8/11/1982 at 772.

Eventhough this 1982 low was only a 25% correction down from the 1980 and 1981 highs--made back above 1000 for DOW but still "just below" the 1067 high made in 1973-- many Ewavers consider this the big Bear Market low coming down from EITHER the 1966, 1968, or 1973 high.

I'm not sure why they think a 25% correction in 1982 was the major Bear low when the 1974 low was 46%, but we will find out which was the actual low by 2012...or sooner!

1986: With the most the prolific deficit spender in history now firmly planted in the White House (until now)--after having been re-elected in 2004 (oops I mean 1984)--then not even the "fully expected" 4-Year Cycle low for 10/2006 makes "much of a dent" in the major stock indexes.

In addition, Reagan's willingness to borrow money LONG so as to cut taxes SHORT--for the mega wealthy only and a now all too popular right wing trait--he also had a new spin on the old "COLD WAR,"so as to help bring out the war drums and "bully up the economy"...and stock prices of course!

The actual "correction" for that 4-Year Cycle low started "just a little early," once again, with a first dip down to DOW 730 on 8/4/1986. The DOW then made its retest and higher-low on 9/29/1986, at 732. As always, the "peak" of the cycles "INFLUENCE" was early to mid October of 1986.

Of course, a "mini-war" into Grenada (in 1983) and the now re-newed "Cold War"--being escalated by President Reagan, Rumsfeld, and Cheney with their STAR WARS flim flam--were key factors in 1986's "apparent skip," or early low, of that 4-Year Cycle.)

1990: Even with a major war monger like Reagan being replaced by Bush Sr., a lesser war monger, the "prospects" for another bullish "mini-war," and the revival of the old Cold War, "seems" strong enough that the markets continue to drag themselves ever upward, and the 1987 market high, made at about 2,750 in DOW before the 10/19/87' Black Monday crash, is taken out in 1989.

While Bush Sr. did manage another "mini-war" in Panama, most likely to "boost" the sagging markets in 1989, with the U.S.S.R. falling a part and the "prospects" for a continuation" of the Cold War now looking poorly, Ms market rolls over into another "fully expected" 4-Year Cycle low...in 9/1990.

Needless to say, that "fully expected" 4-Year Cycle "low" was "forced in a little early" by the so very convenient attack on Kuwait...by Iraq's Mad Man, and former U.S. buddy, Saddam Hussien. Needless to say, even without the "prospects" for a new Bogeyman to replace the Soviet Union, the markets bottomed and continued to drag themselves ever higher, after the first of many Greenspan GHOST RECESSION "saves"...in 1992.

1994: Even with a Democrat in the White House and the "prospects" for a renewal of the Cold War now getting dimmer by the day, the markets continue their weak advance up since the 1990 4-Year Cycle low.

In the fall of 1994, the markets make only another "weak" correction--since their is really little to correct since the 1990 low--and the markets show strength in spite of only some "weak" prospects that Clinton will "play the game" and start another bullish war.

Of course, with the invasion of Mogadishu and then his strong backing of the U.N. in Bosnia, some might argue that Clinton was actually "playing the game."

On the other hand, with Newt Gingrich in control of a Right-Wing congress, the BOYZ may have thought they could, eventually, provoke a full fledged bull war in Iraq or Bosnia...or better YET, from their view point, both Iraq and Bosnia.

By the way, maybe this would be a good time for some American's to "think back" on John McCain's bold criticism of President Clinton--in 1999-- for: "refusing to send ground troops into Bosnia-Croatia," and then his follow up forecast that: "we will never be able to weed out Slobodan Milošević [Bosina's Sadam type Mad Man] without sending in ground troops."

Of course, even after Clinton had the good sense NOT TO send ground troops into Bosnia, Kosovo, or Croatia those countries are now free and stable...with Milošević having been turned over by his own people and now tried, dead, and burried. HUM?

1998: With no new, or serious, bullish war to support a renewed leg up in deficit spending--and especially with the government budget now heading toward becoming "balanced"--the whole Big Bull Market up since 1974, and/or 1982, was starting to "look tired."

While the FED helped "boost" the U.S. markets through the fall of 1997, even as Asia Contagion "starts" to come unglued--as fully expected--by the spring of 1998 a lot of alarm bells are ringing...at least for those of us who know what alarm bells look like and sound like.

As the next, "fully expected," 4-Year Cycle approches--set for sometime in 10/1998 of course--the market "drags" itself ever higher until early August.

As a few seasoned traders may recall, the first "major crack" in the stock dam comes in early August, 1998, when RUMORS began to fly that: Russia would default on their bonds.

Eventhough few world class banks had any "serious" exposure to Russia, and it was already long expected that Russia would, or very likley could, default on those bonds it did have, all world markets weakened a little more and the U.S. rolls over into a nasty litlle decline for the rest of August and September...as "fully expected."

Soon after the first of October, 1998, the rumors "started" to fly that "a large Hedge Fund was "taking massive losses" due to a wrong "bet" on Russian debt...and U.S. interest rates.

On, or about, October 8, 1998, the public first learns that this Private Hedge Fund, Long Term Capital Management (LTCM), was not only in deep doo-doo from those losses, BUT that the U.S. FED, under the "direct supervision" of Allan Greenspan, had "secretly" brokered a deal to "save" them (LTCM).

Needless to say, with the U.S. Stock Markets now down big time from the summer highs, and this now being the "exact prime time" for a "fully expected" 4-Year Cycle low, then the markets "bounced up hard" on that news. Of course, when the FED comes out and makes an "emergency" RATE CUT, to "provide market liquidity," the BIG BULL was back on.

After that 4-Year low was put in, Greenspan makes another 1/4 point cut in the FED FUNDS rate in November; eventhough, LTCM had been "saved"--and handed over to Chase, Morgan, and other big banks as a gift--and Asia was clearly weathering the 1997 storm.

BY THE way, take note that IF Greenspan had CUT rates in August or September of 1998 then it "very likely" would have been LTCM who not only "survived," but also "won" the RATE GAME...with Morgan, Chase, and few other banks taking the blood bath. HOW NICE!

2002: Since all U.S. indices had been in a major decline down from their 2000 highs, I and a few other Cycle Analysis were pounding the table for another "fully expected" 4-Year Cycle low in October, and we not only got it but it was "exactly" on time...being made between 10/8 and 10/10 of 2002.

Now, with the key U.S. Yield Curve holding it's "steepest," and "most bullish," SPREAD since the 1974-82 low, most professional traders and brokers were not even remotely surprised when this 4-Year Cycle low turned out to also be the bottom of the whole Bear Market since the 2000 highs...at least SO FAR for Nasdaq!

While that low was severely RE-TESTED on March 12-13, 2003, Bush Jr.'s "timely invasion" of Iraq, on March 18, 2003, provided a new and bullish war for his sinking economy...and assured that the 10/2002 bottom held for most, but not all, stocks and/or indexes.

By the way, if you recall, Bush Jr. and Cheney were making an all out push to invade Iraq in the fall of 2002, and only got delayed when congress and the U.N. intervened.

For anyone with a short memory, Bush stated back in the summer of 2002 that HE DID NOT NEED CONGRESS' PERMISSION to invade Iraq; eventhough, he later found out that was not true.

Oh, and for what it's worth, in March 2002--not March 2003--I was total by some contacts "deep inside" the Pentagon, AND at Fort Bragg, that: The 82 Airborne would be in Iraq by Christmas.

2006: While the markets continued to fight their ever expanding "wall of worry" up into the late spring of 2006, I, a few other professional technicians, and even a lot of amateur traders, were fully expecting another 4-Year Cycle low in October.

While I had warned all my subscribers to be careful of a "bull trap," and even used the 1986 "blow-out" (or sneak out ), as an example, I STILL fully expected to get that major low...and dead on time.

However, eventhough I should have "clearly" recognized the FED rate "pause" on 8/10/2006 as the KEY SIGNAL to "prevent" a October low, that revelation did not come to me until early October when it became brutely clear what HAD occured...with the 4-Year Cycle low having already been "forced" in between 7/17 and 8/11 of 2006.

NOTE that while I was personally still "expecting" a second dip down for the "fully expected" 10/2006 low, I was actually long the QQQQ's from just after the 8/11/06 low (which is fully documented)...as having been "saved" by our MSAR trading model.

5/2007: While there are still a few "Guru's" who say the 2006 Cycle low "disappeared completely," and others who are, have been, and will continue waiting for it to hit here in 2007 or 2008, the cold hard facts from past "historic evidence" supports 7/17 to 8/11 of 2006 as the 4-Year "sneak out" low.

That is to say, the history of this cycle clearly supports the process of an early dip first low and a higher or lower retest of that first dip out "some where near" August to October, but there is only 1986-87 to even remotely support the thesis of a: "One year LATE low for this cycle."

Does this mean that there will not be a serious or nasty low made "somewhere" near October of 2007? NO! But if that does occur it WILL NOT BE driven by any influence from the 4-Year--"Presidential"--Cycle.

SUMMARY

Based on a very well defined and clear history of this highly important 4-Year (Presidential) Cycle, a "blow-out," or a "early and weak low" is, more often than not, bullish for the longer term...just think back about the mid 1950's and that one in 1986.

However, given that the 1986 "early out" turned into both a full blown crash a year later, in October of 1987, and then only a weak "recovery" to the 1989 high before the 1990 correction started--actually "starting" in 1989--
then any longer term BULLISHNESS is far from being guaranteed.

So, while the NEXT 4-Year Cycle lows are STILL "clearly" scheduled for March to October of 2010 and 2014, and with one of them very likley to be a real whopper, like the 10/2002 low, and with nearly every amateur cycle hacker on the planet "spinning" some bogus hype that the "4-Year Cycle is dead," just as many thought it was back in 1986, a FEW professional Cycle Analysis are not only "fully expecting" to see that next 4-year low in 2010 and 2014...but WE are also "looking for the next "not so fully expected"--but nearly as reliable-- 4-Year Cycle HIGH in... ?

To find out where that HIGH "should" come in at, or close to: seeing that a cycle's peak influence makes even a lesser "mark" on the indices' charts themselves than the cycle lows--on average--then just subscribe to our World Class Forecasting Service and "follow the yellow brick road."

B.B
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