Identifying Long-Term Bull Markets | Podcast Episode #467

0:00
Hey everybody, this is Ryan Mallory with shareplanner.com Swing Trading the Stock Market.

0:03
In today’s episode, we’re going to talk about spotting long term bull markets here and bear markets. We’ll talk a little bit about that.

0:10
Actually, we’ll talk about that right out of the gate, but this? E-mail today comes from a person that’s wanting to know how to spot that.

0:17
Three to five year bull market, so for the purposes. Of this podcast, I never use people’s real names.

0:24
I give people a good Florida name. And in this case, we’re going to give them the name Mac.

0:27
I don’t think I’ve used the name Mac yet. And Mac writes.

0:30
Hello, Ryan. I have been a listener of your podcast.

0:33
For. Over a year now, I believe it was my top podcast in 2020.

0:37
Four. Yes, that’s what.

0:38
I want to hear. Let’s hear about people.

0:40
Saying that this is the top podcast for them. I I love that I mostly deal with a long term investments, but I also have interest in swing trading.

0:51
How would you determine that a market is in a bull? Or bare phase over a three or five year horizon. What rules or indicators, if any, do you use to determine the phase of the market?

0:58
Thank you, Mac. Now a lot of times people look at it going back in hindsight and say, Oh yeah, well, we’re definitely in a bull market. And yeah, you could say we’re in a bull market right now. I mean since 2022, we have been in a bull market 2023–2024 and so far in 2025 it’s a a continuation of the bull market.

1:17
But there’s obviously cycles. Like what we saw in 2022, what we saw in 2008, what we saw for maybe like 5 weeks, 5–6 weeks in 2020 that technically that was considered a recession and then the .com bubble from 2000 to 2003. Those were the big ones of this Millennium.

1:36
Now I saw an interesting chart that talked about, and I saw this just the other day, about the time spent in recession by decade. It was jaw-dropping, honestly, how little time we have spent in a recession over the last 15 years. 2010s — not a single minute was dedicated to being in a recession. 2010s through 2019 — zero percent. Now in 2020 to 2025, I guess you would say now because we’re like you know almost a month into it, we have spent 3 percent of the time in a recession — not much at all.

2:16
Now, a lot of people might say, oh, man, that was a rough time. You know, I lost a lot of money in 2022 or in 2020, but only only 3% of the time. It hasn’t been much. You compare that to some of the historical averages. And you go back to like the 1940s through the 1980s. Actually, let’s go to the 19, yeah, 1940s through the 1980s, we’ll go with — you had a range between like 9% to 22%.

2:45
So the bottom end of that range, which was the 1960s, 1960s saw a spend about 9% of the time in a recession — that’s three times as much as what we’ve seen so far in the 2020s and much, much more time than what we saw in the 2010s because there was no recessions in the 2010s.

3:04
So you look at it from what we saw in the 1990s — it was 7% and then in the 2000s it was 22%. So 22 percent from the 2000s, where that comes from — that’s obviously the .com bubble that lasted for about 3 years and then we had the great recession in 2008 and we know that was a pretty rough time as well.

3:28
But what was probably more interesting — so we have the 1940s to the 1980s, which was a nine to 22% range. The 1900s to the 1930s was far crazier, where we saw a range between 36% and 45%. We were spending 1/3 to almost half of our time in recessions during the first 40 years of the 1900s. Consistently we were, we were seeing recessions.

3:50
Now, what do I think actually changed that completely around? The Federal Reserve. Federal Reserve was created in 1913. Now what the Federal Reserve does today versus what it was doing in the 1910s or 1920s is far different. Yes, they may say that they have the same mandate of unemployment and low inflation, but their tools or whatever they like to call them — you know — it’s far more aggressive, far more manipulative and there’s a lot more financial engineering that goes on at the Federal Reserve than ever before — much more so than what we saw in the 80s, much more than what we saw in the early 1900s.

4:35
So we’re not necessarily fixing problems. We’re not like, you know, getting rid of recessions. We’re just inflating recessions away. We’re money printing our way out of recessions or even just preventing them all together. But as we’ve seen over the last couple of years, when you’re doing that money printing, there is ultimately consequences that have to be paid. And so we’re seeing that now — we’re, you know, the prices of almost everything has risen by at least 20% over the last couple of years.

5:06
And in some cases — I mean — I know when I go out to eat, it feels like it’s like a 200% price hike these days. I mean, I went to Moe’s — I think Moe’s is pretty much all over the country. I think almost everybody’s been to a Moe’s. It’s a Mexican restaurant, fast food. My son, my two boys, my two sons — they got 2 burritos each. I got what they call like a steak stack. It’s like a tortilla with some crunchy tortillas in there as well, and a whole bunch of meats and rice and all that. I love the place. I love going to Moe’s.

5:45
I think the final bill was 52 dollars for three people to eat at fast food. If I go to — if I go to Five Guys, I got to get a second mortgage, it’s crazy out there. So, you know, why is that? It’s because we have tried to avoid recessions at all costs. So we’ve inflated everything away. You know, yes, the stock market keeps going up, but the hit to our pocketbook is far greater and especially for people who are — who are poor, you know, who don’t even own stocks. They don’t even have any way to offset it so it just gets far worse for them.

6:13
So I’m a — I’m a firm believer in the swing trading. So the guy who wrote me this letter Mac, he’s talking about — he’s into long term investing but also, you know, getting interested in swing trading. I think that there is a good place for both long term investing and swing trade. Now what am I better at? I would say swing trading, but I do have long term accounts — you know — stocks that I buy and hold for many years. I use dividends, I buy bonds, so I believe in having a healthy mix of all those things.

6:43
I don’t like keeping them in the same account though. I keep everything in separate accounts. I have a long term account and a long term account. I have my dividends in a dividend account and my bonds in a bond account. My swing trading in a swing trading account. I don’t mix them because it starts to psychologically play with you. You might be — it’s been a horrible day swing trading, but a great day on the long term side and you’re not really paying attention to the risk on the swing trading because overall you’re doing pretty good, but your swing trading is just garbage or vice versa. And so you don’t want those emotions to be manipulated. You don’t want your thinking to be manipulated either because you think that everything’s fine and dandy when there is some glaring issues being covered up.

7:26
Identifying a long term bear market, we don’t get a lot of them. Like I was talking about earlier. We had the .com bubble that went from 2000 to 2003, that’s the last one we had that was a long term bear market. 2022 got kind of close, 2008 was somewhat close, but from a multi-year standpoint — the .com bubble — that’s the only one that when it fell to pieces, that was from about 2000 to 2003 before it finally bottomed.

7:55
That hasn’t happened in 21 years. So again, you know, a lot of financial engineering and money printing and quantitative easing. That will do a great job of keeping the recessions away at the expense of raising prices on everybody. So I don’t get too too high on expecting multi-year bear markets. I think too with everything going digital, electronic trading and where we’re not on the floor of the New York Stock Exchange as much as we used to. I mean, it’s pretty much like a ghost town on the New York Stock Exchange now.

8:30
I think things are getting priced in quicker. If we’re in a bear market, that bear market is getting priced in far quicker than what we would have seen in like the 1980s for instance. So I think that’s another element to keep in mind.

8:43
Do I think that we could have a multi-year bear market? Yeah, I think even more so than ever before. The tech sector has a higher P/E now than it ever did during the .com bubble. I mean, we are way, way overvalued and it’s like .com bubble 2.0. When does that finally pop? I don’t know. Nobody knows. And so trying to call a top, “Oh, this is going to happen here, we’re definitely going to get a top and the market’s going to fall apart.” There’s a lot of people that’ll say that.

9:12
I was showing my son yesterday on YouTube. I was like this — this is how you get clicks on YouTube honestly — is to start videos that say the market’s crashing every day. And people are doing it. It’s like, “Oh, this is going to be doom and gloom for the market tomorrow” and it doesn’t happen but that’s what people are doing. That’s how people are getting the clicks all the time.

9:34
So if you say, “Hey, here’s an analysis on Apple,” like what I did just the other day, it doesn’t get as many clicks because it’s informative, it’s educational, and a lot of people that go onto YouTube don’t want to see that kind of stuff. But I still do it anyways. Nonetheless, I know that there’s people that benefit from it, so I do it.

9:58
Bear markets, from what we’ve seen over the last 20 years, they tend to be much quicker than ever before. They tend to — you know — if you take the 2022 one and you take the one from 2008 — roughly a year. You take the one in 2020 — was that about 5 weeks? Wasn’t long at all.

10:15
I don’t have high expectations for bear markets lasting a long time. If we do see this this tech bubble that we’re currently in with the AI mania that’s ongoing finally burst, I would be shocked if it was like a three or a four year stock market bear market. But crazier things have happened nonetheless.

10:38
One of the things that I tell people, and it’s something that I’ve gotten much better at doing — it’s not always been easy for me — but I don’t care which direction the market goes in, really. I mean from a swing trading standpoint, we shouldn’t care which direction the market goes in. If the stock market wants to keep going higher…

10:54
…I mean from a swing trading standpoint, we shouldn’t care which direction the market goes in. If the stock market wants to keep going higher — let’s say the stock market goes up 500% this year. Obviously, no one really expects that to happen, but let’s say it did. Let’s say it just went on the craziest run we’ve ever seen.

11:10
As a swing trader, should I care? No. Shouldn’t care at all. I should just trade the direction. But what gets a lot of people into trouble is they take it personal. They’re like, “No, no, this market has to crash.” And you don’t want to be that way. You want to be willing to adjust to whatever direction the market’s going.

11:25
Now, how do I identify the bull markets? And this is important. A lot of it — where the markets will bottom — is when the selling is exhausted. That’s what you want to keep in mind. It’s a very simple principle, but it’s essentially when there’s no more supply to overwhelm the demand. And so when the demand starts to become greater than the supply, the market starts to go back up.

11:53
At the end of bear markets, it’s when we are hitting historically oversold levels on the market. So one of the things that I like to use a lot is the T2108. You guys have probably heard me talk about it a lot. I don’t own this indicator by any means. It comes from TC2000, which — there is a link to their software platform in the description and the notes.

12:24
What I look for on that, and it helps me to identify historical extremes — when I start seeing things get into single digits, that is oftentimes one of the better readings of when, “OK, sellers are getting exhausted here. There really isn’t much more selling that can possibly happen.” Now, that doesn’t mean that it turns on a dime the next day. But you take 2022, for instance. Back in June and October of that year, we hit single digits twice.

12:49
And that — and what, by the way, what the T2108 does, before I forget to tell you that — it measures the percentage of stocks trading above their 40-day moving average. So when it gets down to like 8–9%, you’re starting to get at some historical lows.

13:07
We haven’t seen single digits since 2022. And so it doesn’t happen every year. It doesn’t happen — it can go multiple years without it happening. Like I said, I haven’t seen it since 2022. We’re now in 2025. But when we do get those levels, that’s usually a good opportunity, in my opinion, to start loading up on some long positions — not aggressively. Because in 2022, what I was doing is I was loading up on some long term positions steadily. I was just adding a little bit at a time.

13:34
I wasn’t trying to get overly aggressive. I wasn’t YOLOing my long-term capital into trades or into investments. I was doing week by week. I was adding some each and every week, and I tend to do it just once a week. I don’t try to be like, you know, too meticulous about it.

13:55
What I also don’t like to do is get into stocks that are very speculative because when you’re reaching historically oversold levels, those are the times where some of your really good stocks — some of the stocks that you can count on to be profitable going forward and that probably even during the recession remained profitable — you can count on them to be the ones that lead the way back higher.

14:18
So when the markets do sell off and when the markets reach that historically low oversold levels, I’m looking to buy like Apple and Google and Tesla and Microsoft. Let me back off — maybe not Tesla. If Tesla got low enough, yes, I probably would. But Tesla can be a little bit volatile and a little bit crazy.

14:38
But Microsoft, NVIDIA, Home Depot, Caterpillar — stocks that they’re really not going anywhere. They’re going to be around. So those are the ones that I like. What I’m not going to go buying during, you know, when the market’s historically oversold is stocks like SoFi.

14:57
For those keeping track at home with the stock symbols. Or — I’m just not going to be overly aggressive with very speculative plays. So I’m not going to go buy a four or five dollar stock usually. Now it doesn’t mean that I won’t ever do it because when you take stocks — like for instance, I bought Robinhood, which might surprise some because I always bash on it, especially during the 2000s. I was bashing on Robinhood all the time because their platform was more like a casino.

15:24
I haven’t used it much since then, but I know that they’ve made a lot of improvements to the platform. So I bought HOOD at like — I think it was like $9.20 or something like that. So that was like a speculative play I bought. DraftKings at like $12 — that was a speculative play as well.

15:38
But I would say 90% of my capital went to, you know, blue chips. You know, the stocks that I know that are going to do good over time — that I’m not too worried about. And if the market’s going to recover, it’s going to be because those stocks came back.

15:53
It’s going to be very hard for a market to recover if NVIDIA, Microsoft, and Apple continue to go lower. You’re talking about almost, you know, $12 trillion worth of stocks right there. If those don’t participate, you really don’t have a market recovery. So those are the kinds of plays that I’m looking at when we’re at historically low levels. Go

16:13
At historically low levels. Now you never know when the market’s going to bottom. So one of the things that I would tell Mac here is this: don’t try to time the market bottom. What you want to do is wait for the market to show you signs that it’s trying to bottom. And from a long-term investments perspective, you want to just dip your toes into the water very slowly, because over time you will still have — you may not get right there at the very bottom, but over time there’ll be still plenty of opportunity to continue to add to those positions.

16:40
I don’t think that you need to go, “Okay, I’m going to put 10% of my portfolio on this thing. This is the full position right out of the gate because I got a low reading on the T2108.” No. Like I said, it happened in June and it happened in October. So there’s about, what, four months of separation between those months. So I was building up that position starting in June, and then even into October, November, and December, as the market was starting to bounce, I was still adding to my positions over time there.

17:07
So one of the things — and one of the reasons why I wait for historically oversold levels — it’s not because I know for sure that the market’s bottoming at that point in time. It’s because trying to get long from a long-term perspective — I’m investing for many, many years to come — at levels that we’re at right now in this S&P 500, where we’re over 6,000 and we’ve been on this incredible run since 2022, even more so since 2020…

17:40
When you get those bear markets, what you have to watch out for is how they can wipe out years’ worth of gains. You go back to 2008 when we had the Great Recession — it wiped out like 11 years’ worth of gains. It went back to like 1997 or so. It was crazy — huge amount of gains that was wiped out by the 2008 Great Recession.

18:03
You go back to the .com bubble — it wiped out three or four years’ worth of gains. You go to even 2022 — at one point we had almost wiped out two years’ worth of profits. It’s better to get in at the tail end where we’re talking about wiping out a few years of profits and then you’re starting your new positions right there.

18:22
Because if we do get into — let’s say we do get into finally a multi-year — we’re definitely overdue for one — a multi-year bear market, we could easily see, you know, 2024 go up in flames, 2023 go up in flames, 2021 — because obviously 2022 was already up in flames — but 2021 and 2020 all go up in flames. It’s very much possible.

18:46
Now do I think that’s necessarily likely? No. But if you get into a multi-year sell off, multiple years will be wiped off the books. And what I want to do is I want to get in at the tail end of those years being wiped off the books and be able to start new long positions. Because when it does bounce back, one — markets tend to, when they put in the bottom finally — it attracts a lot of buying initially and so you can get a huge jump right out of the gate where you have a huge cushion in your long-term positions right away.

19:17
And so trying to get in in 2025 when the market’s trading at all-time highs and building long-term positions doesn’t make a lot of sense to me, because if we get into even just a one-year sell off, it could easily wipe out everything that we saw in 2024 and maybe even 2023 — just like what we saw in 2022 when we had that sell off.

19:37
So you want to be cognizant of the potential of a market pullback here and what it would mean if you’re buying stocks for the first time here in 2025 from a long-term perspective.

19:49
Now from a swing trading — I’m just going to keep, you know, trading the direction of the market until the market changes. But from a long-term perspective, I haven’t added really anything to my portfolio — my long-term portfolio — since 2023. I’ve just been very, very slow about it. Because we haven’t got any historically oversold readings.

20:09
Believe it or not, the T2108 — one of the things that helped me with this bounce that we’ve seen over the last 7 days — was the fact that we were getting way too oversold on the small caps and everything else stocks. And by everything else stocks, I mean like your stocks like — that are not mega caps related essentially. They’re not Tesla, they’re not NVIDIA, they’re not Microsoft or Apple. They’re your Caterpillars, your Home Depots, your Wayfairs, Restoration Hardware, NextEra Energy, Southern — utilities — those kinds of companies.

20:43
Those stocks were getting very, very oversold — the everything else stocks. And I think the T2108 was printing like readings of I think like 18 or 19% at one point. I’m like, “OK, if we keep selling off, even though the market hasn’t sold off that much, everything that is not mega cap related has been selling off — it’s just not being reflected in the indices — we’re going to be at historically oversold levels.” I don’t think you can get short right here. I think the market’s setting up for a face-ripping bounce. And sure enough, we ended up getting one.

21:18
So that — that was essentially how I was able to identify it — as like we’re selling off way too hard on all the other stocks right now.

21:24
In any case, hopefully in this podcast episode you guys are able to get a good feeling for how to identify long-term bull markets. Is it a perfect science? No. But there’s clues that you can look for when it comes to long-term bear markets. They don’t happen much, but when they do happen — and they’re happening much less these days than ever before — they tend to be a lot quicker than what we saw during the 1900s or the 10s, the 20s and the 30s of last century.

21:53
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22:12
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22:32
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22:46
And if you want a question — believe it or not, most of the people who write the show do get an episode out of it. So write the show: ryan@shareplanner.com. I’m the only person that reads the emails. I’m not sharing it with anybody or posting it anywhere. It’s just me, my eyes only.

23:04
Thank you guys. And God bless.

23:09
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23:24
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23:41
If you have any questions, please feel free to e-mail me at ryan@shareplanner.com. All the best to you and I look forward to trading with you soon.