The 100-yr Dow & the Next Big Thing

Secular trend Rules

A secular up trend will contain at least 5 bull and bear cycles and usually will introduce “The Next Big Thing” or the Dominant Theme, which will persist for 20+ years and eventually end with an asset bubble or a crisis.

A secular down trend will contain at least 3 bull and bear cycles one of which will be a Granddaddy Bear. The Granddaddy will be the largest bear in the series in terms of duration and magnitude. It is usually the 1st or 2nd bear and is typically introduced by a Crisis which in turn will kill the current “Big Thing”

Some past Asset Bubbles and Modern Crises

The first automotive boom of 1909 through 1927, the Nifty Fifty buy-and-hold bubble of the late 1960’s, the second automotive boom of 1946 to the Arab Oil Embargo of 1973-1974, the Dot Com technology bubble late 1990’s and the U.S. Housing Bubble of 2005 – 2007 and the Subprime Lehman Brothers crisis of September 2008.

Note the recent break of the Dow up and out of the 2000-2013 secular bear – likely driven by a new Dominant Theme – any suggestions?