The question is have we seen the end
of this cyclical bull market and are we now entering a cyclical bear market?
The Relative Strength Index (RSI) seems to be a good indicator
of the cyclical bull and bear markets.
The price action is the other reason for the uncertainty as to whether this year's rally marked the start
of a cyclical bull market.
However, there should still be good returns to be had before the end
of this cyclical bull market.
Not exact matches
It's why Wilson stressed that although we're seeing a
cyclical top for US stocks, we're still in the middle
of a secular
bull market.
A normal, run -
of - the mill
cyclical bear market wipes out more than half
of the preceding
bull market advance.
World growth will remain low on average but negative in the UK and Europe; price inflation will remain sufficiently subdued for a while longer so as to impose no constraint on monetary expansion; central banks will sustain a regime
of negative real interest rates and rapid monetary expansion; the risk
of a eurozone collapse is off the table for now; finally, stock markets should continue to perform better than expected, even though the four - year old
cyclical bull market is long by historical standards.
April 4 - Omar Aguilar
of Charles Schwab says U.S. stocks are still in a
cyclical bull market and feels that retail investors will get back in the market as the housing and labor markets stabilize.
What it really did was prevent people from embracing one
of the best
cyclical bull markets
of our lifetime — in both stocks and bonds.
Nevertheless, the birth
of a new
cyclical bull market suggests the potential for a multi-year up move to come.
The benchmark index SPX, -0.23 % has posted a record close 151 times so far during the latest
cyclical bull market, which is about half
of the number
of all - time highs during the 1990 - 2000 cycle, according to Stovall, who said the high number
of all - time highs is not an indication
of future disappointments.
Instead, this is nothing more than a
cyclical bear market within the confines
of a multi-year secular
bull market.
After the third longest
bull market advance on record, fresh deterioration in key trend - following components within our measures
of market internals (see Support Drops Away) recently joined this extended, overvalued, overbought, overbullish peak, even as the S&P 500 hovers at the top
of its monthly Bollinger bands (two standard deviations above the 20 - period average) and
cyclical momentum rolls over from a 9 - year high.
The public generally believes that a new
bull market began early this year after having sat out the first 4 years
of the still - ongoing
cyclical bull that began in March
of 2009.
Clearly, silver underperformed gold during the first two years
of each
of the last three
cyclical precious - metals
bull markets that occurred within secular
bull markets.
The boxes labeled A, B and C on this chart indicate the first two years
of the
cyclical precious - metals
bull markets
of 1971 - 1974, 1976 - 1980 and 2001 - 2011, respectively.
I've seen a lot
of commentary in which the author assumes that this year's rally in the gold price is the first rally in a new
cyclical bull market.
However, after enormous bailouts
of the largest financial institutions in the country, as well as the auto industry, and even more monetary ease than in 2003 (accompanied by TARP, the stimulus plan, QE, and QE2); we started another
cyclical bull market within the secular bear market.
We believe a case can be made that the recent market peak signals the end
of this historic
cyclical bull run.
However, the age
of this
bull market does suggest risks are rising, and that to expect it to last much longer without a
cyclical downturn would be stretching historical probability.
I'm fully aware
of the
cyclical nature
of the commodities business, but clearly the greater the
bull market, the more severe the bear market.
The counter to that is that this is merely a
cyclical bull market in the context
of the secular bear market that started in 2000.
Unfortunately, for the crude oil
bulls, each
cyclical rally will be unable to exceed the price level
of the previous rally.
If July turns out to be the low point for this bear market, it will then mark the second highest level
of valuation that a
cyclical bull has ever started from (the highest starting valuation level was in 2003).
Essentially, a secular
bull period comprises several
cyclical bull - bear cycles, where each
bull market achieves a successively higher level
of market valuation at its peak.
As the guys at Nautilus Capital note,
cyclical bull markets within secular bears have tended to average just 26 months, with an average gain
of 85 %, while
cyclical bears within secular bears have averaged 19 months, with steep average losses
of -39 %.
We view rapid flows into passive strategies as a
cyclical phenomenon which invariably distorts equity valuations in the later stages
of a
bull market.
I feel that stocks are still one
of the best investments available due real earnings and liquidity, but I need to adjust my strategy depending on the kind
of market like
cyclical bull market,
cyclical bear market, secular
bull market, and secular bear market.
My own controversial perspective is that we are in a
cyclical bull market, which is a part
of a larger secular bear market.
A
cyclical bull market followed the low returns
of 1933, and secular
bull markets followed the low returns
of the early 1940's and early 1980's.
In our final blog post
of 2017, we argued that the 2018 investment «vintage» would likely be defined by history as marking a
cyclical turning point within a much larger secular
bull market for global risk assets.
There are those who think that we are simply experiencing a healthy pullback that is part
of the wall
of worry just like we saw in 2004, during that
cyclical bull market.
Despite my view we are in a
cyclical bull market, the fact remains that we have covered a lot
of ground in a short amount
of time since February.
Within a secular trend, there may be a number
of shorter
cyclical bear and
bull markets.
Yet, if we accept the notion that secular bear markets include
cyclical bull markets within them, and if we recognize the epic nature
of the risk - off movement
of capital, «secular» is a more accurate descriptor (than «
cyclical»).
As you can see, this secular bear market was typical
of most secular bear markets, such as the one from 1966 - 1982, composed
of mostly vicious
cyclical bull and bear markets that result in a mostly sideways long term movement.
What began as a
cyclical bull market in 1996, has surpassed even the most positive market predictions
of industry observers, as the real estate market goes from strength to strength.