Bull Market Reaches Its 74th Month...

The S&P 500 bull market that began on 03/09/09 is now in its 74th month.

The average bull market for the stock index since 1950 (including the current bull) has lasted 59 months. 

source: BTN Research 

Historically, What Do Stocks Do Before And After The Fed Starts Hiking Rates?...

Sooner or later, the Federal Reserve will begin normalizing monetary policy, which means higher interest rates are coming.

This has investors rightfully worried because higher rates mean higher interest costs, which should be bad for profits and ultimately stocks.

Deutsche Bank Chief US Equity Strategist David Bianco examined the history of Fed rate hikes and their impacts on stocks.

"Stocks typically sell-off on the first of a series of rate hikes, but the magnitude and duration of the sell-off depend on conditions," Bianco writes. "During early cycle hikes the initial sell-off was generally small, quickly recovered and further S&P gains came in next three months and longer (like 2004, 1983, 1972). But many sell- offs on late cycle hikes became corrections or even bear markets."

Unfortunately, it's only in hindsight do we know where we are in the cycle.

"Determining whether it’s early or late in the cycle is subjective, but the shape of the curve, inflation measures, years since the last recession can help," Bianco said. "Next year is likely another mid-cycle year and we don’t expect a severe S&P reaction to hikes, but the risk is the Fed hikes too late or too little and inflation accelerates requiring the Fed to hike to levels higher than expected."

Bianco's 27-page research note is riddled with exhibits. But we thought this one was pretty elegant.

It's the average price move of the S&P 500 during the 4 months before and the 6 months after the 1st rate hike. It's the average of the last 7 hikes.

It's not the most helpful chart for people who enjoy obsessing over the details. It does, however, show that the general direction of the stock market tends to be up.


Read more: http://www.businessinsider.com/how-stocks-move-around-first-fed-rate-hikes-2014-9#ixzz3EMoczX9P

Current Bull Market Exceeds the Average Duration...

The bull market for the S&P 500 is in its 66th month.

Since bottoming on 03/09/09 (i.e., 65 months ago), the S&P 500 has gained +220% (total return) through the close of trading last Friday, 08/08/14.

The average bull market for the S&P 500 since 1950 has lasted 58 months.

Getting Long In The Tooth? The Bull Market Celebrates It's 5th Birthday...

A 5-year anniversary should give pause to anyone who lends much credence to stock market history.

Going back to 1921, the current bull market's rally is only 2 percentage points shy of the average performance. And the average bull market has lasted only 6 weeks longer.

The median bull-market return and duration are +115.4% and 50 months, respectively—leaving the current bull market looking long in the tooth indeed.

Why This Bull Market Is Long In The Tooth...

The S&P 500 bull market that began on March 9, 2009 has lasted approximately 49 ½ months.

The average bull market for the S&P 500 since 1950 has lasted 57 months.

How Long Might This Bull Market Last?

The current stock bull market began its 29th month as of 07/09/11, having started when the S&P 500 bottomed at 677 on 03/09/09.

There have been 9 other bull markets since 1950.

The average length of time for these 9 previous bull markets has been 4 ½ years or 54 months.  

Three of the 9 previous bulls lasted less than 3 years.  

Source: BTN Research
    

This Bull Market Is Lagging The Typical Bull Market By A Healthy Margin...

Even after almost doubling in 24 months, the S&P 500's two-year return is still -36% below the average bull-market gain of +131% since 1962, according to data compiled by Bloomberg and Birinyi Associates. 

The 730-day rally without a decline of -20% or more compares with an average duration of 1,407 days before a decline of -20%, the data show.

The S&P 500: Bull Market Duration Perspectives...

7 of the last 10 bull markets for the S&P 500 stock index have reached at least 3-years in length and 5 of the 10 lasted at least 5 years.
 
The current bull market is the 11th bull for the S&P 500 since 1949 and it will mark 2-years in length on March 9, 2011.

Source: BTN Research

Status Of This Market: Bull or Bear?

Ned Davis Research reports that the average bull market since 1900 has produced gains of +81.2% and that the S&P had popped up +79.93% through April 23. Therefore, this bullish phase is long in the tooth. 

According to Bespoke Investment Group, there have been 58 corrections of -10% or more in the Standard & Poor's 500 since 1927.

In 25 cases (43%), corrections that reached the -10% mark went on to become a full-fledged bear market, while 57% stopped short of turning truly ugly.

However, Bespoke also warns us that in the 32 instances when the market has dropped as much as this one (as of June 7th the S&P had pulled back -13.7% on a closing basis and -14.68% on an intraday basis) the corrections have a distinct tendency toward continuing.

According to Bespoke’s research, only 7 corrections of this magnitude stopped short of the bear market definition (generally defined as a decline of -20% or more). 

And in the 25 instances in which the decline reached the -20% mark, the average decline of the bear move was -35.5% from top to bottom.

In light of the above, it's prudent to err on the side of capital preservation until the climate improves.

Ned Davis Research: The Cyclical Bull Rally is Not Over...

“A strong tape, corporate yields still falling, sentiment not showing extreme optimism, and low inflation are a pretty bullish signal,” Ned Davis says, adding that “at this point in time we don’t have any evidence that the cyclical bull market is over.”

The excerpt above is from an article published at AdvisorPerspectives.com by Robert Huebscher, which summarizes Ned Davis's current market outlook.

Read the full article by clicking on the link below...

Ned_Davis-The_Cyclical_Bull_Rally_is_Not_Over.php