Market Analysis
1988-1999 Bull Market
The 1988-1999 bull market followed the 1987 market crash and lasted for over a decade with the S&P 500 gaining over 600%. The bull market ended in March 2000.
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 1988-1999 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 1988-1999 bull market on a 90-year chart with the S&P 500 index plotted as a bar chart with quarterly bars.
Chart 90yr: 1988-1999 Bull Market
Chart by stockcharts.com
As can be readily observed from the long-term 90-year market chart, the 1988-1999 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 1988-1999 bull market on a 20-year chart with the S&P 500 index plotted as a monthly bar chart.
Chart 20yr: 1988-1999 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 1988-1999 bull market higher. This bull market followed on from the 1987 market crash that halted the preceding 1983-1987 bull market.
The 1990s were a time of strong economic growth, steady job creation, low inflation, rising productivity and an economic boom. All of this is reflected in the chart with booming investor confidence that drove the stock market higher.
The 1988-1999 bull market did contain numerous pullbacks which are common place within bull markets.
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.
Early Years Market Chart
The 1988-1999 bull market is shown with the first four years plotted on a five year weekly bar chart.
Chart Early Yrs: 1988-1999 Bull Market
Chart by stockcharts.com
The 1988-1999 bull market started in October 1997 following the 1987 market crash. The early years also contained a significant pullback in 1990 and is analyzed separately in the 1990 market correction.
Later Years Market Chart
The 1988-1999 bull market is shown with the last three years plotted on a four year weekly bar chart.
Chart 6yr: 1988-1999 Bull Market
Chart by stockcharts.com
The 1988-1999 bull market ended in March 2000 as a result of the Technology bubble from the 1990s collapsing, which saw an end to the decade long bull market.
The later years also contained a significant pullback in 1998 and is analyzed separately in the 1998 market correction.
Early Years Market Charts: Rallies and Pullbacks
The 1988-1999 bull market is shown for the earlier years plotted on a 5-year line chart with two moving average indicators.
Chart MA Early yrs: 1988-1999 Bull Market
Chart by stockcharts.com
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 market normally progresses with a sequence of rallies and pullbacks, with the 12-week moving average making higher Relative Highs (RH) and higher Relative Lows (RL).
In 1990, the market made a new Relative High, but the Relative Low fell below its previous Relative Low. This is a significant pullback and will be considered to be a market correction, which is analyzed separately in the 1990 market correction.
Later Years Market Charts: Rallies and Pullbacks
The 1988-1999 bull market is shown for the later years plotted on a 4-year line chart with two moving average indicators.
Chart MA Later yrs: 1988-1999 Bull Market
Chart by stockcharts.com
The later years chart shows a pullback in 1998. While this appears to be a normal pullback, it lost over 20% in just two months. This is an excessive loss for a pullback and will be treated as a market correction and analyzed separately in the 1998 market correction.
The bull market came to end in March 2000 which lead to the 2000-2002 bear market.