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Thursday, November 25, 2021 12:35:33 PM
Looking Ahead, history suggests that we're still in the early to middle stages of a bullish super cycle
By: Tom Bowley | November 25, 2021
Looking Ahead
The past is the past and we can't change any of it - whether we'd like to or not. But the future is not certain or settled. We will play a starring role in our financial future. I'm certainly an optimist when it comes to the stock market as history tells us that stock prices rise much more often than they decline. Also, history suggests that we're still in the early to middle stages of a bullish super cycle. The big picture says that we're in a multi-decade period that favors the equity market. Check this out as pictures do literally say a thousand words:
While many incorrectly try to call major long-term market tops using daily charts, media headlines, and/or preconceived biases, these types of major market reversals are best seen and confirmed on long-term monthly charts. Secular bear markets have never occurred without 2 technical conditions present simultaneously. First, the monthly PPO MUST see a bearish centerline crossover AND the monthly RSI must pierce 40 support. While these signals will not occur at a market top, they do alert us to the fact that we'll be in for YEARS of frustration. These signals absolutely should be viewed as bearish technical confirmation and investing/trading strategies should be adjusted accordingly. Fortunately, we're potentially in Year 8 of this secular bull market. I consider the start of a secular bull market to be the time that we clear previous tops. In the case of the current secular bull market, it occurred on April 10, 2013. Previous secular bull markets have spanned up to two decades, which would take us to 2033. That means we could very well be in Year 8 of 20 of a major market advance. Before you think I'm totally nuts, you need to realize that cyclical bear markets can occur during secular bull markets. We've already had two - one during Q4 2018 (trade war) and Q1 2020 (COVID-19 pandemic) - during the current secular bull market. I'm not at all suggesting that we'll go straight up for the next 12 years. I believe the secular bull market in the 1950s and 1960s saw multiple recessions and cyclical bear markets.
Based on history, however, I believe the next dozen years will be incredibly important in building wealth through equities as the subsequent secular bear market will most likely produce a shift into other asset classes and be much, much more challenging.
Happy Thanksgiving and Happy Trading!
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By: Tom Bowley | November 25, 2021
Looking Ahead
The past is the past and we can't change any of it - whether we'd like to or not. But the future is not certain or settled. We will play a starring role in our financial future. I'm certainly an optimist when it comes to the stock market as history tells us that stock prices rise much more often than they decline. Also, history suggests that we're still in the early to middle stages of a bullish super cycle. The big picture says that we're in a multi-decade period that favors the equity market. Check this out as pictures do literally say a thousand words:
While many incorrectly try to call major long-term market tops using daily charts, media headlines, and/or preconceived biases, these types of major market reversals are best seen and confirmed on long-term monthly charts. Secular bear markets have never occurred without 2 technical conditions present simultaneously. First, the monthly PPO MUST see a bearish centerline crossover AND the monthly RSI must pierce 40 support. While these signals will not occur at a market top, they do alert us to the fact that we'll be in for YEARS of frustration. These signals absolutely should be viewed as bearish technical confirmation and investing/trading strategies should be adjusted accordingly. Fortunately, we're potentially in Year 8 of this secular bull market. I consider the start of a secular bull market to be the time that we clear previous tops. In the case of the current secular bull market, it occurred on April 10, 2013. Previous secular bull markets have spanned up to two decades, which would take us to 2033. That means we could very well be in Year 8 of 20 of a major market advance. Before you think I'm totally nuts, you need to realize that cyclical bear markets can occur during secular bull markets. We've already had two - one during Q4 2018 (trade war) and Q1 2020 (COVID-19 pandemic) - during the current secular bull market. I'm not at all suggesting that we'll go straight up for the next 12 years. I believe the secular bull market in the 1950s and 1960s saw multiple recessions and cyclical bear markets.
Based on history, however, I believe the next dozen years will be incredibly important in building wealth through equities as the subsequent secular bear market will most likely produce a shift into other asset classes and be much, much more challenging.
Happy Thanksgiving and Happy Trading!
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
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