馃悅馃搱 S&P500: MARKET CYCLES [BULLISH & BEARISH] 馃搲馃惢
Another new year, or one less, is coming. Anyone would like to know the future of the markets. Given the impossibility of predicting it, it is enough to analyze what is known. In the last 100 years, the SP500 has had the next patterns:
馃斀 1937 - 1950: bearish market [13y]
馃敿 1950 - 1966: bullish market [16y]
- 1957: Flash crash
馃斀 1966 - 1980: bearish market [14y]
馃敿 1980 - 2000: bullish market [20y]
- 1987: Flash crash
馃斀 2000 - 2013: bearish market [13y]
馃敿 2013 - ¿? : bullish market [¿?y]
- 2020: Flash crash
馃毄 1942- 1974: Market capitulation [32Y]
馃毄 1974 - 2009: Market capitulation [35Y]
馃毄 2009 - ¿? : Market capitulation [¿?y]
Given this, the average secular bear market is ≈ 13 years and the average bull market is ≈ 18 years (with some flash crash every ≈ 7-10 years). Furthermore, each full market capitulation occurs every ≈ 33.5 years on average.
Nevertheless, the complexity comes from the multipolar world between USA, China and Russia, and other relevant countries such as India, Indonesia, Nigeria, Pakistan, Iran, Saudi Arabia, Israel, Brazil, Singapore, Vietnam or Argentina. The only thing we know about the market is from when the United States won World War II and became the hegemon, but the future could be different.
A priori, the hypothesis is that the next bull market could finish in 2031, and the next bear market could be between 2031 and 2044, with the maximum capitulation occurring in 2042. The problem is that the cycles could be different due to China's ambitions to overtake the US by 2049. In fact, if this were to happen, any crash could be brought forward, and the date would fit between 2031 and 2044.
There could even be a World War III similar to the Great War of the 30 years (World War I and World War II). This could create a lateralisation of the market for at least 30 to 50 years. This would cause a bear market from 2030 to 2060 or 2080 (similar from 1900 to 1950), until the next hegemonic resurgence. However, this is unlikely since the biggest burden on Eastern regimes is their autocracies, which have proven unproductive over time.
The best analysis is yours!
J. Joel Padilla
Copyright: Joel Padilla 2025
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