Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Are Apple, Tesla, and Bitcoin Entering Market Technical Excess Top Phase? - 18th May 21
Gold Watch Out as Price May Be Staging New Momentum Base In Preparation For A Big Move Upwards - 18th May 21
Why the Demand for US Real Estate Licenses May Soon Fall into a Sinkhole - 18th May 21
Semiconductor Equipment Maker ASML Is at the Center of the Global Chip Shortage - 18th May 21
Could This Be The Hottest Investment Sector For 2021? - 18th May 21
TESLA Tech Stock Bubble BURSTS! Stock Price Heading for CRASH to below $400 - 18th May 21
The Most Exciting Biotech Stock Of The Year? - 17th May 21
Gold Mining Stocks Fundamentals - 17th May 21
Junior Gold Miners Should be Rallying – What’s Holding Them Back? - 17th May 21
Stock Market - Should You Be In Cash Right Now? - 17th May 21
Learning the Financial Markets - 17th May 21
INVESTING IN HIGH RISK TECH STOCKS - ALL OR NOTHING - 16th May 21
Is Stock Market Selling Madness About Over? - 16th May 21
Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
Budgies Birds of Paradise Indoor Grape Vine Singing, Chirping and Flying Parakeets Fun 3D VR180 UK - 16th May 21
Wall Street Roiled by Hot Inflation Data: Is This REALLY “Transitory”? - 16th May 21
Inflation Going Stag - 16th May 21
CHIA Coins After 1st Week of Plotting 140 Plot 14tb Farm. Crunching the Numbers How to Win - 15th May 21
Tips to Create the Best Cross-Functional Teams - 15th May 21
Gold: Lose a Battle to Win the War - 14th May 21
Are You Invested in America’s “Two-Hour Boom” Fast Shipping Stocks? - 14th May 21
Gold to Benefit from Mounting US Debt Pile - 14th May 21
6 Solid Signs You Should Have Your Smart Device Repaired Right Away - 14th May 21
Ways to Finance Your Business Growth - 14th May 21
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Are We In Another 1990’s-Style Super Stocks Bull Market? 

Stock-Markets / Stock Markets 2014 Dec 05, 2014 - 07:05 PM GMT

By: Sy_Harding

Stock-Markets

Bull markets normally last an average of 4.5 years. By that time, stocks are usually over-valued, the market is over-extended, the Fed is making plans to cool off the enthusiasm, and the bull market/ bear market cycle begins to sequence into the next bear market. 

Super bull markets, those that go beyond the norm, have been once in a lifetime anomalies, driven by unusual, life-changing technological transformations. There have been two in the last 100 years.


The 1920’s super bull market, fueled by the introduction of electricity into homes and factories, transforming lives, lasted a record nine years (before ending with the 1929 crash). Seventy years later, the 1990’s super bull market, fueled by the introduction of computers and automation, established a new record, lasting 9.3 years (before ending with that bubble bursting in 2000).

The current bull market has now lasted 5.8 years.

Is it near an end? Or as it enters its seventh year will it, as the 1990s market did in 1997, continue on to significantly higher highs? That is, did another ‘once in a lifetime’ super bull market begin in 2009, just nine years after the last one ended?

There are interesting similarities to the 1990’s bull market that support that thought.

Both periods began with high and worsening annual budget deficits, and government debt at record levels, resulting in dire forecasts for the country’s future. In both periods, an anemic economy was taking an inordinate length of time to recover from a recession. Politically, in both periods, voters elected a charismatic young president who promised changes that would produce a recovery. In their first terms, both were criticized for seeming to be more interested in social reforms than the economy. However, they were re-elected.

In their second terms, the economic recoveries began to show progress, and the budget deficits began to decline, almost unnoticed but quite dramatically.

In the 1990’s bull market, as the 7th year began, investor enthusiasm for the latest new thing, dotcom companies, began to manifest itself. Their attraction was not rising profits. Most were operating at substantial losses. Their allure was the growth in their number of users, which they would surely learn how to monetize - or so investors thought. And the bull market continued.

As we enter the 7th year of the current bull market, we have similar excitement being created by the many social media companies seemingly coming out of nowhere, hoping to follow the earlier success of Facebook and Twitter. Most are not profitable in spite of a surging number of users.

In the 1990s, the market was supposedly under the protection of the ‘Greenspan put’, confidence that the Greenspan Fed would do whatever was needed in the way of stimulus and low interest rates to prevent a market decline.

In the current bull market, much support has come from similar confidence in the ‘Bernanke Put’, which has now morphed into the ‘Yellen Put’; that the Fed will do whatever it takes to prevent a market decline.

In the late 1990’s, we had corporate insiders selling, and hedge funds, institutional investors, and others, warning that market valuation levels, investor bullishness, and other conditions were at levels indicating a significant market top was imminent. They were wrong. Small investors were right in their enthusiasm, as the market continued ever higher. (The so-called smart money eventually capitulated and joined in the enthusiasm).

Currently, we have a similar situation. Insiders have been periodically selling heavily for two years now. Hedge fund billionaires and others have been warning for some time that the market is over-valued. So far they have been wrong. Hedge funds are currently in the news for being on the wrong side of the market and underperforming for a second straight year. Meanwhile, as in the late 1990s, investor sentiment and confidence remains unperturbed, and the market keeps making new highs.

Do I believe another ‘once in a lifetime’ super bull market began in 2009, just nine years after the last one ended, and has several more years to go without a correction of the excesses?

Nothing has happened so far in the 5.8 years since 2009 to contradict the possibility.

However, be careful with that thought. The odds are much greater that normality will prevail rather than another once-in-a- lifetime ‘this time is different’ experience.

A big difference this time is that the Fed created a housing bubble and two stock market bubbles in an eight-year period, each time with devastating results for the economy when they burst. It seems determined not to allow this bull market to follow that pattern.

It has already eliminated its QE stimulus. The surprisingly strong jobs report, on top of the surprise upward revision of 3rd quarter GDP growth, will quite likely have it raising interest rates sooner than expected, and probably faster than expected if the market moves too much further toward bubble levels.

My intermediate-term technical indicators remain on a buy signal. My subscribers and I continue to take advantage of the market’s tendency to make most of its gains in its favorable winter season.

However, the market is short-term overbought, and I expect another pullback of 4 to 5% to alleviate that overbought condition before the rally resumes. Concerns that the Fed will begin to raise interest rates sooner than expected may well be the catalyst.

Beyond the intermediate-term, conditions will be quite different when this favorable season ends, if the economy continues to improve, if the bull market continues further into high valuation levels, if the Fed is beginning to raise interest rates.

Sy Harding is president of Asset Management Research Corp., and editor of the free market blog Street Smart Post.

© 2014 Copyright Sy Harding- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Sy Harding Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in