Three of President Johnson's years were bullish. The post election
year of 1965 was uncharacteristically bullish.
Following 1965's post election year, the
balance of the years in this presidential election cycle were congruent
with historical standards. The mid-term election year was classical, as
the stock market found a classical cyclical bottom in 1966. Bull signal
#02 was triggered a few month's later when the Dow crossed above the NTI
Blue with supporting Force Vector configurations. Some may ask why bull
signal #02 could have been triggered earlier. Again, rules must be
followed. The Dow had to cross above the short-term blue curve before
garnishing a bull signal. As you can see, the short-term blue curve
disallowed that for several weeks, as the Dow crossed above and below the
Mid-term Yellow Curve.
The secular bull market of sixteen years
perished on "hear they come again" political rhetoric. LBJ's Great Society
program was now in the making. Academic credentialism and socialistic
causes stimulated an extended bear market for several years following the
peak in 1965. The stock market is asking,
"where is the production?" Who is going support all these planned
non-producers of goods and services. The stock market is asking will these
beneficiaries of the Great Society be allowed to breed yet more
non-producers of goods and services. Remember, politicians only talk to
the weak for they, for the most part, have plenty of time to listen to
them.
The stock market seemed to enjoy the creation of
VCR's; not because of brain killing TV watching, but because many people
would want them and that is production. The stock market likes positive economic
activity. You will later see, it took several more years before the stock market
returned to its 1966 peak.
As you can see, the stock market showed little
response to the assassinations of Dr. Martin Luther King and Robert F.
Kennedy.
