The stock markets go through a cycle that historically lasts 17 years, remarks Dr. Steve Sjuggerud for Daily Wealth. So the real question now is whether the fear of the masses has reached an apex, or will it worsen and drag the the markets down a couple more years?
Either way, Sjuggerud thinks we investors are staring at a “historic buying opportunity” and a bull market should start in maybe 5 years’ time.
Looking at the S&P 500, Sjuggerud sees stocks below the moving average line, which shows a bearish inclination. He defines the return of an uptrend when the S&P 500 starts closing above the 45-week moving average, and this would be where the double-digit annual returns start flowing in.
But who knows when the bottom has been hit? It took a whole year to know whether we were in a recession, and it will take awhile before we know the market has hit bottom, too.
For that reason, we instead watch the trendlines using the 200-day moving average. Before diving into stocks and ETFs prematurely, we’ll wait for the trend to appear.