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100 years of Market Cycles

Market Analysis


1970-1972 Bull Market

The 1970-1972 bull market started in May 1970 and lasted for around two years with the market gaining nearly 80%. The bull market ended in January 1973.

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 1970-1972 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 1970-1972 bull market on a 90-year chart with the S&P 500 index plotted as a bar chart with quarterly bars.

Chart 90yr: 1970-1972 Bull Market

The 1970-1972 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 1970-1972 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 1970-1972 bull market on a 20-year chart with the S&P 500 index plotted as a monthly bar chart.

Chart 20yr: 1970-1972 Bull Market

The 1970-1972 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 1970-1972 bull market higher.

This bull market was part of the swinging stock market of the late 1960s to mid 1970 where the S&P 500 index oscillated up and down with increasing amplitude rather than being directional.

This bull market brought an end to the 1969 bear market.

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.

4-year Market Chart

The 1970-1972 bull market is shown again with a shorter time-frame on a 4-year chart plotted as a weekly bar chart.

Chart 4yr: 1970-1972 Bull Market

The 1970-1972 bull market on a 4-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 1970-1972 bull market started in May 1970 and lasted for two and a halve years.

The S&P 500 index gained around 80% and the bull market ended in January 1973 with the 1973-1974 bear market.

Market Chart: Rallies and Pullbacks

The 1970-1972 bull market is shown again with a 4-year line chart and two moving average indicators.

Chart MA: 1970-1972 Bull Market

The 1970-1972 bull market on a 4-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.

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

The 1970-1972 bull market was a shorter bull market and had only one pullback.

The bull market started with a rally in May 1970 (noted on the chart with the first RL - Relative Low) and this rally peaked in April 1971 (the 2nd RH - Relative High).

The S&P 500 index then pulls back to bottom in November 1971 (2nd RL), the market then rallies again up until January 1973 (2nd RH) which was the top of the bull market.

The 1973-1974 bear market then followed the 1970-1972 bull market.