Are Stocks Headed For a Bear Market?

In Adam Hamilton’s latest article he explains why investors’ complacency could soon turn into outright panic as the threat of a bear market increases with each passing day.

Hamilton makes a very good point when he explains that all bull markets usually mature when greed is at its peak (no secret there), but also when complacency grows excessive. Essentially, what he is saying is that when all the buyers are done buying, and the market is in wait and see mode, that’s usually when the rug is pulled out from underneath us. At that point, the bears come out of hibernation and begin fear mongering. When all the sellers have been scared out of the market, the floor is set.

Hamilton explains to readers that this cyclical bull-market has been longer lasting than most and is due for an inevitable crash. It’s a natural occurrence.

He goes on to explain the two different types of bear markets. The first being a secular bear and the second being a cyclical bear (secular bears are much longer and  more severe than cyclical bears). Hamilton states that “A full secular bull-bear cycle lasts a third of a century, or about 17 years each for the bull phase and bear phase.  To get up to speed on this essential strategic context, read one of my essays on Long Valuation Waves.  Our current full secular-bull-bear cycle began way back in August 1982, but the second secular-bear half started in March 2000.  We are now 12 years into this phase, which again is likely to last 17 years.”

The article explains that we have been in a secular bear market since 2000. It appears this secular bear is no different than any other and should last 17 years - meaning 2017 is when it should conclude.

Within secular bear cycles it is possible (and in fact very likely) to have cyclical bull markets. A cyclical bull market is what we’ve experienced since 2009 to the present. Hamilton’s latest article is a great reference in learning about such trends and finding out exactly what he believes is coming for the market.

Click here to read the full article.