Often a secular bear change can be seen on an index chart when it usually coincides with the start of a cyclic bear market. Looking at the Aords index chart below an oddity happened, the secular Bear cant be seen because it started during a cyclic bull market.
Secular Bulls and Bears are not measured by the market index they are measured by the market Annualised PE Ratio..
Secular Bull cycles can last for 25 years as it did I think for the Aords 1974 -1999. The average Secular bear cycle is about 16 year.
However secular cycles are measured by distance traveled not by time ..on rare occasions a secular cycle could end very early (a few years)due to a large event.
Usually the market index reaches higher highs and has higher lows during a secular bull cycle.
Usually the index wavers within a trading pattern (flat tops) during a secular bear cycle but it can (not always) have lower lows
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so secular theory has it that the S&P500's current cyclic bull market cycle should the peak around 1500 area ....but theoretical and practical are sometimes different because there ain't no such thing as a perfect world...occasionally an abnormal event happens (big profits increases) and that was the case with the Aords secular bear cycle before the year 2008 which creating higher highs....
Note: It's important to understand that research has proved that the performance of the economy is no better off nor no worse during either Bull or Bear secular cycles.
However a high inflationary period is a characteristic feature of a late stage mature Secular Bear Phase.
NOW the Million Dollar Questions..The Aords 2004 - 2007 freak show is over and it is still in the secular bear cycle so, which top do we expect the next cyclic bull market to peak at, the 5000 top or the 7000 top..the distance traveled is showing that the secular bear is close to ending (Annualised PE below 10 for a length of time longer than an adverse event happening) but probably could have another cyclic bull and bear cycle left to go yet before the secular change.
Referring to the Annualised PE Ratio distance traveled..the Aords secular bear market cycle is at a more mature stage than the US markets at this moment in time...but an adverse event could change this.
Dont be fooled by the charts upward median line (suggesting 7000 is easily achievable)..normally (in theory) the median lines are horizontal or slight downtrending during the secular bear cycles.....but Aords is (or was) not normal this (secular) time around.
My Annualised PE Ratio chart is a bit dated and it is for the ASX200...maybe if we ask nicely and say Please!! Winner69 may give us an updated version :)
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