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Lifespan of a bull market: Shortest, longest since 1900

SAN FRANCISCO (CBS.MW) -- A bull market is underway, some experts say, but how long it will last is the big question. Based on market history, this emerging bull seems to have a long way to run.
 
According to the Stock Trader's Almanac, a respected investment-reference guide, a bull market began October 9 and is now about 230 days old. That's less than a third of the length of the average bull market of 723 days, or almost two years.
 
The present bull run already has outlasted six of 33 bull markets recorded since 1900, but history doesn't rule out a sudden retreat: Bull markets have ranged in duration from 61 days to more than seven years, according to the Almanac.
 
Whether we're in a bull market remains a matter of debate, based on the definition used. A generally accepted definition is a prolonged period of rising stock prices during which market indexes rise more than 20 percent. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq are all up at least that much since their post-2000 lows in October. See related column "Five reasons we're ignoring the bull market." The Almanac uses a measure created by Ned Davis Research, which factors in both magnitude and duration. It defines a bull market as a 30-percent rise in the Dow after 50 calendar days or a 13-percent rise after 155 calendar days. Also, in some instances, a 30-percent rise in the Value Line Geometric Index since 1965 also qualifies.
 
"We've got a 22.1 percent rise in the Dow as of (Monday), since the October 9th closing low, for a period of 236 days," said Jeff Hirsch, publisher of the Almanac and the Almanac Investment newsletter (see HFD data).
 
For the current bull to die, the market would either have to be off 30 percent after 50 days from, say, yesterday's top, or be down 13 percent after about five months, Hirsch said.
 
Some of the shortest bulls have been slain by what came before. The Dow Jones industrial average gained 93.9 percent from July 8, 1932 to September 7, 1932, but that 61-day spurt couldn't last.
 
The fact that Franklin Delano Roosevelt was campaigning helped spur the market up, but some of that gain had to be given back, Hirsch said. "When you go up 93 percent in two months, you're going to give some of that back over the next six months."
 
Another run-up, from April 8, 1939 to September 12, 1939 saw a 28.4 percent gain over 157 days. That was based on a bounce back up after German tanks rolled into Hungary, Hirsch said. The market didn't rise again until the U.S. entered the war, he said.
 
Hidden bulls
 
Many bull-market definitions, and market watchers, likely missed a few of the bulls the Almanac's measure has caught. For instance, the Almanac notes that from September 21, 2001, soon after the terrorist attacks, to March 19, 2002, the market gained 29.1 percent over 179 days.
 
The longest bull market on record during the 1990s is considered by many to have ended in 2000. But the Almanac's measure has that bull running from October 11, 1990 to July 17, 1998 -- the longest-running bull market, ratcheting up a 294.8 percent gain along the way -- then dying for 45 days.
 
"That was the shortest bear market on record," Hirsch said, noting that his calling it a bear is based on a 30 percent reversal in the Value Line Geometric Index.
 
The second-longest bull notched a 344.5 percent gain, running 2,138 days from October 27, 1923 to September 3, 1929.
 
Bulls and bears are often scattered throughout cycles. "You take the super bull cycle from 1982 to 2000 and there were a handful of each in there," Hirsch said. "Then we had the rise from '87 to '90 just before Gulf War I, before Saddam invaded Kuwait on August 2. Then we had the bottom, October 1990, the major bottom before we ran for the rest of the 90s," Hirsch said.
 
Said Hirsch: "That's part of the elusive nature of calling the bear and bull market. Everyone has different definitions of it."