Cyclical Bull Market Seen

Friday, May 29, 2009

Following excerpted from Bob Brinker's Marketimer newsletter:
We define a secular bear megatrend as one during which the major indexes make no material and sustainable progress above their historic highs. During such extended periods, a series of cyclical bull and cyclical bear markets occur...

...The current secular bear megatrend began on March 27, 2000, as measured by the S&P 500 Index. Although this index registered a minor new closing high in October of 2007 by a slight margin of 2.5% over the March, 2000 closing high, the recent cyclical bear market carried the index to a close of 676.53 in early March of this year. Although we expect this year's March closing low to mark the absolute closing low for this secular bear megatrend, we expect a series of cyclical bull and cyclical bear markets to unfold until the megatrend is exhausted. The fundamental underpinning to this trend will be the tremendous fiscal challenges facing the country in the years ahead. These challenges will also make the proper conduct of monetary policy a very difficult exercise.

Here are the cyclical market trends dating back to March of 2000 as measured by the S&P 500 Index:

Cyclical bear market I from March 27, 2000 to March 11, 2003 lost 48%;
Cyclical bull market I from March 11, 2003 to October 9, 2007 gained 95%;
Cyclical bear market II from October 9, 2007 to March 9, 2009 lost 57%;
Cyclical bull market II from March 9, 2009 is now in progress.


Anonymous said...

interesting perspective. fits with your idea of the "decade of consolidation" of the tech move.

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