Think the bull market is long in the tooth at almost six years of age? Maybe not.
Major Trend Index fell to Negative at beginning of August. Assumption is that we are now in the beginning of a cyclical bear market that may produce a 20%-25% loss within the next six months or so.
Current market recovery continues to track the post 1974 bear market recovery quite closely.
Current market is closely aligned with the 1973-1974 post bear market recovery. Expect to see series of higher lows before market ultimately makes new high.
Drama, if not direction, have become one of the stock market’s few certainties.
Improving cyclical leadership could be signaling that the bear market is in its final stages. In 10 of the 12 past bear markets, cyclical stocks turned up prior to the conclusion of the bear.
Many of the broad market indexes climbed to new cyclical highs in late-December, confirming that 2007 is almost certain to begin with a bull market still in command.