TERM-INATOR:

At this week's Gold Conference in San Francisco, a newsletter by the Aden sisters looked back to prior double-term presidents and the effect on the Stock Market. Lyndon Johnson's second term contained the end of the 17-year cycle Bull market from 1949 to 1966 ( Harry Truman's double session was just prior to this cycle) with a 25% drop during Viet Nam; Nixon's stumble with Watergate saw the '72-'73 Bear; Reagan's Iran-Contra dustup preceded the 1987, 36% drop, while Clinton's scandal coincided with a 38% decline just before he left office. Googling the 1900s before these, only Ike, post-WWII, left office without the Bear chasing him out: Teddy R-1903; Woodrow W.-1918; Coolidge left just before 1929; and FDR had his second term decline in 1942. That's 9 out of 10 -pretty good odds against George W. for '06 or '07, also bad years for the 4-year Presidential cycle.
We'll have to see if this theory applies to Arnold the Terminator if he gets re-elected. Previous two-timers were Gray Davis, Pete Wilson and Geo.Deukmejian.
Today's negative action was foretold by a couple of extended Sentiment Indicators, at least short term: the McClellan Oscillator (ratio-adjusted) broke the 50 mark, rising to 51; the ISEE call/put ratio screamed to 295 Friday - way over the 200/bearish line. Nearing the overextended zones are the Bullish per cent - at 64, still not toppy until mid 70s. I'm still awaiting a couple more indicators due to Barron's recent delinquent delivery service.