Market Analysis
1932-1936 Bull Market
The 1932-1936 bull market started in July 1932 and lasted for over four years with the market gaining around 400%. The bull market ended in March 1937.
Charts from stockcharts.com are used to analyze all of the market cycles that have occurred over the last hundred years. Analyzing the market cycles with charts gives stock investors a visual representation of how the stock market moves over time.
The Dow Industrial Average is used to analyze the 1932-1936 bull market and all market cycles prior to 1957 (The S&P 500 index was formed in 1957 and all market cycles from 1957 are analyzed using the S&P 500 index).
100 Year Market Chart
The following chart shows the 1932-1936 bull market on a 100-year chart with the Dow Industrial Average plotted as a monthly bar chart.
Chart 100yr: 1932-1936 Bull Market
Chart by stockcharts.com
As can be readily observed from the long-term 100-year market chart, the 1932-1936 bull market is just one of many bull markets that have occurred.
The 100-year market chart also shows a 240-month simple moving average which has spent most of the last hundred years trending upwards. This shows that over the long-term the market has broadly continued higher as the moving average followed the Dow Industrial Average higher.
20-year Market Chart
The following chart shows the 1932-1936 bull market on a 20-year chart with the Dow Industrial Average plotted as a monthly bar chart.
Chart 20yr: 1932-1936 Bull Market
Chart by stockcharts.com
A 12-month simple moving average is also plotted on the 20-year market chart. The 12-month moving average is a useful indicator used in Technical Analysis for highlighting market cycles. As the 20-year market chart shows, the 12-month moving average followed the 1932-1936 bull market higher.
The 1932-1936 bull market followed on from the 1930-1931 bear market where the market lost 90% of its value. The severe plunge from that bear market set in motion a bargain hunting frenzy.
Even though the 1932-1936 bull market occurred during the worst economic climate in financial history (the 1930s Great Depression), the lure of rock bottom stock prices (which were well below book value) was just too hard for bargain hunting investors to resist.
Most investors new to the stock market are under the impression that the stock market only moves in the direction of the current market cycle.
In reality, the stock market moves in cycles and alternates between bull markets (where stock prices broadly increase) and bear markets (where stock prices broadly decline).
Fortunately for investors, bull markets are usually longer than bear markets. This means that stock prices spend more time increasing in value than they do losing value.
Bull markets last anywhere from two years to around a decade, whereas bear markets are shorter and usually last a year or two and sometimes three.
3-year Market Chart
The 1932-1936 bull market is shown again with a shorter time-frame on a 5-year chart plotted as a weekly bar chart.
Chart 5yr: 1932-1936 Bull Market
Chart by stockcharts.com
The shorter time-frame provides more detail. As the chart shows, the 1932-1936 bull market started in July 1932 and lasted for more than four years regaining a sizeable portion of that lost from the 1930-1931 bear market. The Dow Industrial Average gained around 400% and the bull market ended in March 1937.
Market Chart: Rallies and Pullbacks
The 1932-1936 bull market is shown again with a 5-year line chart and two moving average indicators.
Chart MA: 1932-1936 Bull Market
Chart by stockcharts.com
The above line chart for the Dow Industrial Average shows a 52-week (long-term) and a 12-week (short-term) simple moving average.
The 52-week moving average (purple line) broadly slopes upward following the bull market. The moving average did flatten out through 1934 as the market consolidated before rallying again.
The 12-week moving average (orange line) broadly identifies the rallies and pullbacks that occurred.
The first rally was short, starting in July 1932 (noted on the chart as RL - which stands for Relative Low) and ending in August 1932 (The first RH - Relative High).
The market then pulled back until March 1933 (2nd RL on chart) and then surged higher to peak in March 1934 (2nd RH). The Dow Industrial Average pulls back until August 1934 (3rd RL).
Following the pullback, the market then rallied until March 1937 where it peaked (3rd RH). The 1937-1941 bear market then followed as the Great Depression continued through the 1930s.