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research report

Globe editors have posted this research report with permission of Phases & Cycles. This should not be construed as an endorsement of the report’s recommendations. For more on The Globe’s disclaimers please read here. The following is excerpted from the report:

To clarify the current status of the U.S. and Canadian markets, and the continued existence of a bull market, this report will break down our forecasts into three parts: Long-term (many years), mid-term (1-2 years) and short-term (1-2 months).

The long-term suggests that both the U.S. and Canadian markets are in a bullish phase that commenced in March, 2009. In other words, despite the March 2020 “flash crash” that caused a 35-per-cent decline in the S&P 500 Index (SPX) and a 38-per-cent decline in the S&P/TSX Composite Index (TSX), the North American markets are in a bull market. I am very much aware that the February-March decline of 35 per cent was greater than the designated 20-per-cent level for a bear market (I could never understand why a bear market should be declared because of a certain number), I am convinced, as described in my article in the Globe and Mail on June 4, 2020, that the February-March action was a “flash crash” similar to the 1987 “flash crash” and not a bear market.

There are three important observations for the continued existence of the bull market that began in 2009:

1) All previous bull markets (using data from 1740) have lasted well over the current eleven years; the average is 24.6 years. The previous secular bull market (from 1974 to 2000) lasted 26 years. 2) It is inconsistent to maintain that the SPX is in a bear market when it has recently reached an all-time level, almost 4-per-cent higher than the February high, and 3) it is hard to believe a bearish status when day-by-day there are hundreds and hundreds of stocks in New York (not ETFs or Preferred shares) that reach new 52-week highs.

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