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100 years of Market Cycles

Market Analysis


1958-1965 Bull Market

The 1958-1965 bull market started in December 1957 and lasted for eight years with the market gaining around 130%. The bull market ended in February 1966.

Charts from stockcharts.com are used to analyze all of the market cycles that have occurred over the last ninety years. Analyzing the market cycles with charts gives stock investors a visual representation of how the stock market moves over time.

The S&P 500 index is the industry benchmark and is used to analyze the 1958-1965 bull market and all market cycles from 1957.

The S&P 500 index was introduced to the stock market in 1957 and the index included back tested data to 1925 based on the historical prices of the stocks that made up the index. This provided historical data for comparison with the Dow Industrial Average.

90 Year Market Chart

The following chart shows the 1958-1965 bull market on a 90-year chart with the S&P 500 index plotted as a bar chart with quarterly bars.

Chart 90yr: 1958-1965 Bull Market

The 1958-1965 bull market on a 90-year chart for the S&P 500 index plotted as a bar chart with quarterly bars.

As can be readily observed from the long-term 90-year market chart, the 1958-1965 bull market is just one of many bull markets that have occurred.

The 90-year market chart also shows an 80-quarters (20-year) simple moving average which has spent most of the last ninety years trending upwards. This shows that over the long-term the market has broadly continued higher as the moving average followed the S&P 500 index higher.

20-year Market Chart

The following chart shows the 1958-1965 bull market on a 20-year chart with the S&P 500 index plotted as a monthly bar chart.

Chart 20yr: 1958-1965 Bull Market

The 1958-1965 bull market on a 20-year chart for the S&P 500 index plotted as a monthly bar chart.

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 1958-1965 bull market higher, which was spurred on with strong economic growth fueled by tax-cuts, fast growing wages and high GDP growth.

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.

8-year Market Chart

The 1958-1965 bull market is shown again with a shorter time-frame on an 8-year chart plotted as a weekly bar chart.

Chart 8yr: 1958-1965 Bull Market

The 1958-1965 bull market on a 8-year chart for the S&P 500 index plotted as a weekly bar chart.

The shorter time-frame provides more detail. As the chart shows, the 1958-1965 bull market started in December 1957 and lasted for eight years.

The S&P 500 index gained around 130% and the bull market ended in February 1966 with the 1966 Bear market.

The 1958-1965 bull market also had a correction in 1960 and another correction in 1962. market corrections are more severe than simple market pullbacks which normally appear in bull markets. With corrections, the market loses more and/or they last longer than pullbacks.

Market Chart: Rallies and Pullbacks

The 1958-1965 bull market is shown again with an 8-year line chart and two moving average indicators.

Chart MA: 1958-1965 Bull Market

The 1958-1965 bull market on a 8-year chart for the S&P 500 index plotted with a line chart and two moving average indicators.

The above line chart for the S&P 500 index 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, but is interrupted with the 1960 and 1962 market corrections.

The 12-week moving average (orange line) broadly identifies the rallies and pullbacks that occurred.

The bull market started with the rally in December 1957 (noted on the chart with the first RL - which stands for Relative Low). This rally ended in July 1959 (the first RH - Relative High).

What followed was a minor bear market called a market correction. The sequence of pullbacks and rallies continues through to October 1960 (the 4th RL). This correction is analyzed separately in the 1960 market correction.

The S&P 500 index then continues to rally until it peaks in December 1961 (6th RH). The market then sold down with a severe pullback, the 1962 market correction which is analyzed separately.

After the 1962 market correction the bull market continues until it peaks in February 1966 (8Th RH).

The 1966 Bear market then followed the 1958-1965 bull market.