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The Running of the Bull Market

Depending on who you ask, this may be the longest running Bull Market in history.

For those of you that are unclear of the difference between the Bull and Bear Market; just remember “the 20% rule”.

By standard definition, a Bull Market overturns into a Bear when the S&P falls more than 20% from its normal Bear Market low.

Once the market makes a turn and increases by at least 20%, it becomes a Bull Market again.

Who decided on the specific number of 20%? Evidently, there wasn’t any specific person.

Louise Yamada, a Veteran in the world of Market Watching, said that the idea goes back to her forerunner, Alan Shaw. Alan is labelled as one of the founders of the “20% technical analogy”.

Shaw’s Career began in the 1950’s and was a major presence on Wall Street for decades. The likelihood of him having a hand in the original making of the analysis is very high.

According to many sources, when the S&P closed on March 9, 2009, the Bull Market began its long-standing run.

[Tweet “Since March 9, 2009, the S&P has increased by over 300%.”]

The current Bull Market is now surpassing the age of the previous.

The market in October 1990 lasted just under nine years. The current Bull, as of August 2018, is nine and half years of age.

Before we encourage anyone to get too over excited, be forewarned of two things;

First being, there is no overall standard for what defines a Bull or Bear Market.

Secondly, even if you use the current definition (in most opinions), it is still overshooting to say that we are currently in the longest run.

It seems most believe that the 20% rule is fairly accurate. Specific communities, such as the Stock Trader’s Almanac dismiss the idea completely.

Although unsupportive of the rule, the members of the Almanac agree that the date of March 9, 2009, was a pertinent date. They believe that it marked the end of the severe decline in stock prices. With also the end of the Bear market and that the Great Recession was finally ending.

Which market lasts longer?

The Bull market tends to last almost three times longer than its opposing partner.

In order for the Bull Market to end, there are two components that can play a major role. The Fed and any Recessions.

There will generally be warning signs of the Bull coming to an end, or before a Recession begins. Stock numbers will begin to plummet and interest rates with The Fed will become more aggressive.

To say that the Bull Market is stable at this point, might be an eager statement.

It seems as long as The Fed maintains its interest rates, and there are no signs of largely declining stock numbers; The Great Bull Market will continue to run.

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