Yale & Jeff Hirsch
About the Editor Jeff is editor in chief of the Almanac Investor newsletter Stock Trader's Almanac, StockTradersAlmanac.com, and the Hirsch Organization. He makes frequent appearances on CNBC, CC, Fox, and Bloomberg. Yale Hirsch is founder of the Stock Trader’s Almanac.
After Operation Twist failed to avert a bear market last September we were the lone bulls last October when we declared the rebirth of a new bull market had occurred on October 3. From our October 6 Seasonal Buy Signal to our recent April 3 Seasonal Sell Signal DJIA gained 18.7%. The Fed’s present posturing and boring statements are not doing much to perpetuate the current bull market. It is easy to be disenchanted with the market these days. DJIA has gone virtually nowhere in the past year and besides Apple there is not much positive excitement on The Street. But it is important to keep the current bull market in perspective. I am of the opinion that this latest rally since October is merely another cyclical bull market in the continuing secular bear market that has been in play since 2000 and I expect to continue for 5-6 years longer. This cyclical bull may not end here, but a 10-15% correction seems likely. In my upcoming book, The Little Book of Stock Market Cycles (Wiley) due out July 2012, I compare and contrast the performance of cyclical bull and bear markets within secular bull and bear markets. Cyclical markets were defined in last September’s post. Defining secular bull and bear markets requires a less regimented and more outside-the-box line of thinking. By my reckoning, secular markets span a period of about 8-20 years. I classify secular bulls as an extended period of years, when the stock market produces successive new highs and higher lows. Secular bears are often impacted by protracted military campaigns, financial crisis and the market is unable to reach a significant new high. Four secular bull markets ran from 1896-1906, 1921-1929, 1949-1966 and 1982-2000. The four bears span 1906-1921, 1929-1949, 1966-1982 and 2000 to the present. I prepared the below graphic for my new Little Book. By lining up all the cyclical bulls and bears within the secular bull markets and comparing them to those in secular bear markets the nature cyclical bull and bear markets within secular bull or bear markets is revealed.
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