Secular bear markets can last 12 to 18 years in length where the major indexes don’t make significant price progress and can suffer sharp overall price drops over portions of the period. They are followed by secular bull markets that can last from 20 to 30 years. Since 1900, the indexes have gained from 200% to 1355% during these secular bull market periods.
There are cyclical bull and bear market cycles within the overall secular trend. A cyclical bull market lasts on average from 2 to 4 years. A cyclical bear market lasts from 3 to 9 months and in rare cases as much as three years.
IBD has studied the 27 bull and bear market cycles going back to 1880.
Within the cyclical bull and bear market cycles there are tradable rallies or uptrends and there are periods of time when the market pulls back and corrects.
Read The Big Picture column in IBD daily.
Watch the Market Wrap video at Investors.com/IBDTV.
To Determine the Market’s Current Trend:
1. Read the Market Pulse in the IBD’s Big Picture column. Is the market in an uptrend or downtrend?
2. Watch the Market Wrap Video at Investors.com/IBDTV to learn more about the market’s daily action and to stay on top of leading stocks.
To Find Leading Stocks:
1. Follow the stocks in the IBD 50 (published Monday and Wednesday). Keep a watch list of stocks nearing a potential buy point. (Read the short sentence under each chart to help identify the proper buy point.)
2. Check Stocks on the Move at Investors.com for stocks rising on heavy volume, indicating institutional buying.
3. Read The New America article to learn about innovative companies with exciting new products or services.
4. Find out more about a stock’s fundamentals with Stock Checkup at Investors.com.
1. As you’re going through IBD 50, jot down names of companies that you’re not familiar with. Read articles and learn more about what the company does at Investors.com. Articles can be accessed by entering the ticker symbol in the “enter symbol, keyword” section and then clicking on “search site.”
2. Watch the Daily Stock Analysis videos at Investors.com/IBDTV to learn more about chart reading.
3. Update your watch list:
Have a ready list, stocks that are nearing a potential buy point that you have researched and are prepared to buy if they break out on volume that is at least 40% above average.
Consider entering trade triggers through your brokerage service so a stock could be bought or sold even if you are busy.
Keep another list of stocks that aren’t close to a breakout but that are building a base or consolidating gains, particularly if the stock has already proven itself to be a market leader.
4. Read sections of How to Make Money in Stocks for continuing education and to help understand the CAN SLIM Investing System better.
Add these steps to the daily routine above:
1. Check the mini charts in Stock Spotlight. This list materially outperforms the S&P 500, so any new names that appear on the list may be well worth researching further.
2. Learn more about Sector Leaders in the Research Table Review and find out how they are performing in the current market. These sector leaders are stocks with the best fundamentals, such as outstanding earnings, sales, and a high ROE (return on equity).
3. Read the Industry Themes article to keep up with leading trends among industry groups or to see if there is a shift from one leading industry group to another one.
4. IBD’s New High List shows stocks that have reached new 52-week highs. IBD research shows that stocks making new highs tend to go higher. The New High List Analysis describes more about the companies that are making new highs and have top fundamentals.
5. Read and study the historical charts from William J. O’Neil’s article, How to Find and Own America’s Greatest Opportunities in the Wednesday edition.
For continuing education read articles in Investor’s Corner.
Add these steps to the weekend routine above:
1. Check Your Weekly Review (found in the Friday edition) mini charts for stocks approaching a potential buy point. Research more about the company with articles found at Investors.com.
2. Study chart patterns of stocks setting up by using Investors.com charts or by using MarketSmith charts, a premium charting service and IBD sister company.
3. Listen to IBD’s How to Make Money in Stocks radio show at Investors.com/radioshow.
4. Study the 100 charts that are in the front of How to Make Money in Stocks to learn more about base patterns and life cycles of the big market winners.
5. Write in a journal your trades for the week or thoughts about the general market. This will help as you do a year-end post analysis.
C = Current Quarterly Earnings of at Least 25%
Where to find earnings in IBD:
Stock Spotlight charts
IBD 50 charts (Monday and Wednesday editions)
Big Cap 20 charts (Tuesday)
Your Weekly Review (Friday)
A = Annual Earnings Growth of at Least 25% over the Past 3 to 5 Years
Return on equity (ROE) of at least 17%. Where to find annual earnings in IBD:
Stock Spotlight charts
IBD 50 charts (Monday, Wednesday)
Your Weekly Review charts (Friday)
N = New Companies with New Products, New Services, New Price Highs
Where to find in IBD:
The New America (daily)
IBD 50 (Monday, Wednesday)
Internet & Technology (daily)
IBD New High List (daily)
S = Supply and Demand
Huge increases in volume compared to the daily average = demand. Where to find in IBD:
Volume % change
Accumulation/Distribution Rating
Stocks On The Move (print edition, eIBD and Investors.com)
L = Leader vs. Laggard
Look for the top stocks both fundamentally and technically in the very best-performing sectors and industry groups. Where to find in IBD:
IBD Stock Checkup (Investors.com)
IBD 50
Your Weekly Review
52 Week Highs & Lows
I = Institutional Sponsorship
The big money. The smart money. Where to find in IBD:
Accumulation/Distribution Rating
Volume % change
Stocks on the Move (Investors.com)
Is the general market currently in a confirmed uptrend or downtrend? Where to find in IBD:
The Big Picture
