click for larger table
no bulls no 20 percent
Source: Merrill Lynch Global Research,


Interesting look at bull markets that have gone on without a 20% correction (note this is within the context of a 20%+ cyclical rally).

Merrill Lynch’s Global Research team note that 2 prior cyclical bull markets marked a transition from a secular bear market to a secular bull market:

April 1942 to May 1946: Markets then rallied to 1966;

October 1974 to November 1980: After a 24% pullback, secular bull market busted out in 1982.

Whether the March 2009 to August 13 2013 cycle will similarly mark the start of a longer secular bull has yet to be decisively determined.  The rallies off the bottoms in in 1942 and 1974 did mark generational lows.

Merrill adds that “December 1987 to Mar 2000 and March 1935 to March 1937, ushered in the start of the 2000-2013 and 1937-1950 secular trading ranges.


A closer look at the best bull markets in excess of 20%
Stephen Suttmeier, Jue Xiong
Merrill Lynch Global Research, 13 August 2013


Category: Cycles, Markets, Technical Analysis

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.

14 Responses to “Bull! Rallies Without 20% Corrections”

  1. [...] We are in the midst of a big bull market without a 20% correction.  (Big Picture) [...]

  2. bgad says:

    What would seem to make this bull market unique is the unprecedented global monetary creation over the last 5 years. Doesn’t this just represent asset inflation?

  3. [...] Bulls without corrections (The Big Picture) [...]

    • Angryman1 says:

      Frankly, I am not seeing much global monetary creation when added with debt deflation and government fiscal bailouts in 2008.

      Most of this bull is recovery and supply sided economics which supports stock prices.

  4. Tamu82 says:

    Merrill must be using SPX closes. There was a -20.35% correction from July 16 1990 intraday high of 369.78 to 10/11/90 low of 294.51. There was also a -21.05% correction from 7/20/98 at 1,190 to 9/1/98 at 939. Sure would change the posted table showing that 1982 to 2000 move of over 500%. Just sayin’.

  5. VennData says:

    And the bond market since Carter-appointed Volker beat inflation? Even after a thirty-plus year run on bonds, charlatans er… a… “fund managers” like Gundlach think it will never end:

    Thirty years? I mean, don’t you think it’s time to take just a wee bit off the table? …cuz it looks like other people are.

    Gundlach was loaning the US money for ten years at 1.6% not too long ago. Bet that’s quite a nice opportunity for tax loss selling.

  6. rd says:

    The 1974 to 1980 analogy is a very bad one. That was a period with high inflation, so the nominal price of the S&P 500 did not remotely reflect what the real price was doing. The inflation adjusted price of the S&P 500 dropped from 1974 to 1980. It appears that their definition of a bull market is something you lose money on by shorting instead of making money on inflation-adjusted terms.

    The 1942 to 1946 bull actually is closer to what we have today with numerous economic and financial distortions, including huge US deficits, wage and price controls, and a sudden flood of people available for the private sector to hire as the government sector released them from war duty.

    The late 40s and early 80s bear markets both ended with single digit Shiller CAPE values and 6%+ dividend yields which were primary valuation conditions for the beginning of the two-decade bull markets that followed. This is not remotely close to our current condition. We would need a 60%+ drop in the current market conditions to re-establish these valuation points.

    You can’t time from these general valuation parameters but they are very good indicators of expected returns over the next decade.

  7. constantnormal says:

    If the length of the bull market is related to the size of the previous smackdown delivered to the economy, then we ought to be in the running to set a new high-water mark for this list … but then I must remind myself that the stock market is only related to the economy in the loosest possible way, existing mostly in the realm of dreams and nightmares …

  8. Miguel Palacios says:

    I find it interesting that very few investors look at global credit to to global gdp, I know that Mr. Rithotlz posted a research note about the low correlation of returns to Government debt to GDP, but total debt to gdp is far more important (ie Ireland, Spain). We live in a credit based system so how can we grow without credit growth and how can we have credit growth in a world with 316% debt to GDP globally. Kyle Bass is the only one that talks about this that Ive seen. Still this story has been wrong all year long and I for one have totally missed out on the equity rally in 2013 because of it. Shorting long duration bonds unlevered has only provided a return of about 8% so, so far I have been wrong. Hard to put money to work with so many valuation methods screaming no (CAPE, SP500 total market cap versus US GDP at 116%, record NYSE margin levels)

  9. [...] Bull! Rallies Without 20% Corrections (The Big Picture) [...]