Marc Barhonovich on StreetCast.tv

Marc Barhonovich editor/founder of CommonSenseInvestorNews.com and TheCommonSenseInvestor.com newsletter will now be a weekly featured investment commentator on www.StreetCast.TV

Look for Marc this Friday to go "On the Record" with Bram Solloway during his Straight Talk segment.

Marc and Bram will be discussing many of the current events on Wall Street. The consolidation of the online brokerage firms, the upheaval at Morgan Stanley, the acquistion of Archapelago by the NYSE, and the problems surrounding the Specialist at the NYSE are some the topics that will be covered.

www.StreetCast.TV is an independent financial portal that is revolutionizing the way financial content is broadcast over the internet. They deliver TV quality broadcast to your computer with no delay. The show has also been picked up by 287 affiliates in the US and Canada.
I am excited to work with all of the analysts and commentators at StreetCast.TV. The quality of the broadcast is excellent and the information professionally presently and timely. I believe that this median is the way we will all receive our news broadcast in the near future. StreetCast.TV is presenting tomorrows technology today and I am excited to be part of the process.

My latest feature will be broadcast on Straight Talk with Bram Solloway this Friday. Please go to www.Streetcast.TV and click the Straight Talk box.

Have a profitable day,
Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem.com

Long Term Outlook

The Presidential Cycle within a Range Bound Market

The presidential cycle which is one of the most reliable investment cycles over the last 100 years, points to troubled times ahead for the markets.

We believe that we are currently "Range Bound" and it now looks as if we are at the top end of the trading range.

Many market pundits say that we are in a secular bear market…whatever that means. If we are in an ongoing bear market and this has been a rally within the confines of a bear market, it points to a tough market coming.

Trading patterns after a bubble…The examples that I will show you of past bubbles look eerily similar to today. If history does repeat itself, which we believe it does, than this also shows us that the markets are in for rough waters over the next 18 months.

From the perspective of market psychology, investment sentiment, four-year mid-term election cycle low, sector rotation, new leadership, aftermath of a speculative bubble, and a host of other micro related technical factors, today's stock market has many of the same characteristics of the 1966-1982 sideways trading range market. We have believed that this was going to be the case over the last 2 years and the markets appears to be acting much the way we said it would.

It is uncanny to see how closely the 90's Tech/Internet Bubble mirrors the Nifty-Fifty debacle of nearly 40 years ago. After almost every major speculative bubble in the US stock market several things happen. First, the market takes many years to unwind the excess speculation and valuation that developed over the past bull market. The last US bull market basically lasted from 1982 to 2000 and the speculative bubble that was created will take more than the last two years to correct. The Nikki bubble burst in 1989 and has been in a sideways market since that time (over 15 years). The US market topped in 1966 and took until 1982(16 years) to begin a new Bull Market. It will also take many years to repair the technical damage sustained during the latest downturn.

Second, new leadership emerges to take the place of the past leaders, many of which are broken stocks. Just take a quick look at leaders from just 5 years ago…JDSU, CSCO, LU, SUNW, and INTC. Many investors are still holding these stocks waiting for their return to glory. They could be waiting a decade or longer. What is happening now is very similar to the market of the 70's when leaders emerged from many of the laggards of that time. Energy, precious metals, commodity related sectors, and others entered into bull market phases during that 16 year trading range market. Over the last year, you may have noticed that many energy and commodity related companies have been leading the current market.

If you are of the BULLISH persuasion, then expect another four years of the existing choppy, sloppy market conditions. If you are BEARISH then we could potentially have another 12 to 14 years of these challenging market conditions. Regardless of which camp you are in, the next few years will be very difficult. Let me show you why…

The most consistent market pattern we have ever run across is the Four-Year Presidential Cycle. The most consistent aspect of the Presidential Cycle is that since the early 1900's, from the low in the 2nd year of each administration, to the high the following year, the market produces a large rally. The first two years of each term tend to be the most negative of the four-year cycle by far.

The first two years of Bush's first term included the serious 2000-2002 bear market, which was brutal for most investors. And then from the low in 2002, which was in the 2nd year of his term, to the high in the 3rd year, the Dow and S&P 500 each gained 43%, while the NASDAQ gained 79%. We can give you many examples of this cycle regardless of who is President or what party they are affiliated with.

Let's look at what our best prediction is for the next four years. We believe that this cycle coupled with yearly seasonal factors make the odds of our forecast coming to fruition very high.
This year should see the market decline after the current rally has run out of steam. The decline should last through the fall and bottom out during the typical October December time frame. Most investors should be totally worn out and extremely bearish which should set the stage for a nice rally into years end and through early spring of 2006.

Once this rally has run its course, the markets should resume their decline ending up at the bottom end of the current trading range. If the declines are serious enough, which we believe they will be, the low in 2006 should be the end of the bear market and the beginning of a new bull market. This will be the 3rd year of the 4 year presidential cycle, typically the most positive year of the cycle.

The current bull market is 29 months old and is showing signs of being its age. We believe the bull is near its final stage and with rising interests, higher oil and inflation; the ultimate end could come sooner rather than later.

Have a profitable day,
Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem.com