David Fuller's view

If you conclude that Wall Street is still in its bull market, and S&P Capital IQ and WSJ.com, believe so, then it is the third longest bull market, presumably in modern history.  Of course many commentators disagree and it has certainly not felt like a bull market since at least mid-2015.  The Dow Jones industrial Average has fallen 21.69%, the Dow Jones Transport Average by 21.69%, the Russell 2000 fell 27.25% and the Nasdaq 100 Index just qualifies for the arbitrary 20% bear market with a decline of 20.01%.  However, the Nasdaq Composite Index has only fallen 19.54% while the S&P 500 Index is comparatively resilient having only lost 15.21% at its January and February lows. 

Well, apologies for sounding like a stats wonk, but to me what we have seen is more bearish than 2011 when the S&P fell just below 20% on an intraday basis, as I recall.  Moreover, this time iconic Apple and the previously sector-leading Nasdaq Biotechnology Index has fallen back from the sky.  

I maintain that Wall Street is unlikely to see much more than a cyclical bear market, which is mostly what we have seen so far, but it could last for at least a few more months.  I am assuming that the US economy will avoid recession, not least because of the consumer stimulus from cheap oil and gasoline.  However, if I am wrong on this and the US does experience a recession this year, that would certainly take the S&P 500 below 1800. 

Assuming we see only a cyclical bear market, what interests me most when looking at the table above is that the 1990 – March 2000 bull trend coincided with the end of the previous secular bull market.  However, June 1949 – August 1956 was the beginning of the earlier post WWII secular bull trend which eventually ended in the late 1960s.  October 1974 – November 1980 was similar to our current market cycle.  August 1982 – August 1987 was the beginning of the last secular bull trend.  October 2002 – October 2007 reminds me somewhat of the 1974 – 1980 period, but only in terms of them occurring between secular bull trends, and they were certainly not alike fundamentally.