The following chart should be viewed and compared with the table that follows immediately below the chart.

Click to enlarge:

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Individual cycle charts follow the jump . . .

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Category: Markets, Technical Analysis, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

9 Responses to “Detail View: S&P Cycles (1932-Present)”

  1. rd says:

    Inflation adjusted graphs would show that the declines in the early 30s aren’t as bad as they look because of the deflation. Obviously, this is from an investment perspective since that period was disastrous for nearly everybody which is why there was deflation.

    Similarly, inflation adjustment would show the 1966-1982 period as a ski slope as just maintaining nominal values created large real losses due to rapidly increasing inflation during that period until Volcker crushed it which started a massive bull market in bonds as well as equities. That period also resulted in high unemployment at the end which was not good for most folks, but the creative destruction did re-start the economy resulting in a 20 year boom in many areas.

    during both periods, dividends helped generate reasonable total returns for buy-and-hold investors because valuations got to low levels with respect to earnings and dividends, unlike this bear market.

  2. gman says:

    Chart just looks like we are begging for another 20-30% pull back..

  3. Petey Wheatstraw says:

    5th cycle (top chart), looks like the Grand Tetons, when approached from the East. Highly volcanic territory. Not good.

    Bubble.

  4. PeterR says:

    The Big Churn should complete by Earth Year 002,021, judging from the 1959-1983 flat (#3 in the chart above +/-).

  5. Rightline says:

    Now all I need to know is if the current period reflects the charts beginning August 1982 and April 1994 or if we will reflect the chart beginning October 2002 ….

  6. Through the Looking Glass says:

    Who needs a chart , Apple is the only one making anything that sells out there unless you believe “GM channel stuffing” numbers. (Google it)
    No jobs, no credit, no sales ,no home equity loans to promote stupid spending….no market, seems easy enough to understand.
    Of course our best and brightest want more Monopoly money from the box to weave more invisible clothes while standing naked.

  7. rd says:

    @Rightline:

    Valuation indicators look like 1937 and 1968. Those were peaks followed by 55% and 37% declines.

    Although these valuations also occurred in 1929, 1998, and 2003 on their way up to bubble peaks which resulted in 90%, 50%, and 57% declines from the bubble peaks.

    If 2008 was a bear market bottom, then the valuation indicators at that bottom would be about 30% higher than the fairly consistent bottom valuations for every bear market since 1900.

  8. Mr.-Vix-It says:

    He forgot to include the 1929-1932 decline. Once you include that all of these averages will change but that’s besides the point.

    The focus should be on the fact that the market was like a pig roasting on a spit around the 10 level during the 1929-1942 bear. It then did the same thing around the 100 level during the 1966-1982 bear and now during the 2000-? bear it is revolving around 1000. Each subsequent bull market goes up by a factor of 10 meaning in the next secular bear sometime in the future we will likely be revolving around the 10000 level. Hard to believe? Not really if you place yourself as an investor in the ’30s I’m sure it was hard to imagine a market at 100 in the ’70s and for an investor in the ’70s it was probably crazy to think the market would be revolving around 1000 at the turn of the next century.

    Also notice that the market easily blew through 50 and 500 and we will likely see an easy move through 5000. But notice at both 25 and 250 there were tests back underneath it. The one around 250 was a little blip known as the ’87 crash. Therefore, I expect a similar pullback after getting through 2500.

    It’s not hard people!!!

  9. blackjaquekerouac says:

    there was no S&P until the 50′s…and even then mutual funds didn’t have all that much dough. Jack Bogle and Peter Lynch changed all that…now they have trillions in assets. And those are the more…”passive”…funds. Now we have exchange traded funds, commodity funds, long short funds, etc. Who knows! We’ll probably even have interest rate swap funds soon. the fact is there has never been a shortage of money to go in the market…and of course USA Inc has not disappointed…which is all too easy to do. I find it interesting to see who else has outperformed “beyond all reason.” Japan for example…