Top forecaster Norman Fosback says “the market’s fundamental position has evolved to the most favorable alignment in 20 years,” and sees big gains for stocks over the next year and the next five years.

Fosback, who served as head of the Institute for Econometric Research for three decades, has a “long and eminent a record”, according to MarketWatch’s Mark Hulbert. Hulbert notes that in the latest Fosback’s Fund Forecaster newsletter, Fosback says his econometric model is calling for the stock market to rise by 19% over the next 12 months, and 89% over the next five years — that’s almost 14% annualized.

Fosback’s model uses several indicators that he has found to have predictive value, Hulbert says, and right now Fosback says the major underlying issues that will drive the U.S. market higher are “domestic corporate profits, valuations of domestic stocks, and Federal Reserve policy.” He says corporate profitability is at an all-time high, but market P/E ratios are back where they were in 1990.

As for the European debt crisis, Fosback doesn’t think it will take down U.S. markets, saying all the talk in the media about Europe is little more than “sleight of hand: Look over there … while the real action is right here.”