It is a popular belief that election years tend to produce bullish stock markets. The obvious impetus behind the phenomenon is that incumbents try to window-dress, hoping to make their previous three years in office appear economically acceptable. And, of course, they do nothing to strain the immediate fiscal well-being of the country, even if stern action might save a future day (for another party).

But as any contrarian knows, market patterns have a way of not repeating themselves, just when everyone expects them to do so. What we were seeing late this spring seems to have been setting the stage for a year in which the exception proved the rule. Stocks ultimately failed at a rally (a month's leg of which is shown in the accompanying graphs), significantly missing a new high when they had the chance early in May. Then the averages crumbled, and established an intermediate-term low by the end of the months. By any measure, that was just plain bad action. Worse from a contrarian viewpoint, stockholders had yet to panic. Shares were not being shaken out in the selling climax that marks a major market turn. And the odd-lot figures, usually tending toward pronounced selling as markets break old lows, gave no definitive bottom signal. More downside "work" apparently was in order.

But hold on. In the midst of the selling -- and the extraordinary bad news that accompanied it, including a Presidential polyp (announced discretely after the market closed one Friday) and ships being blown up in Iran -- stocks that had gone bearish in May 1983 performed admirably. These included any number of high-growth companies, many of which are on the current INC. Index (which, as can be seen, needs all the help it can get). A careful observer had excellent reason to be encouraged as trading bases that had been under construction for several months continued to hold well against the tide.

Based on this commendable performance, one would predict that if the rest of the market proved to be stuck desultorily in a trading range from DJI 1,100 to, say, 1,200, the growth stock sector was in a position to make hay, even if the sun doesn't shine on blue chips.