The Digital Economy Ushers in A Long Term Bull Market CycleI received my CMT charter long ago, when chartered market technician candidates could write a thesis that had potential to change the body of knowledge of Technical Analysis. It did and it continues to serve me and my students well.
It was called "Cycle Evolution Theory" and my specialty is in the long-term cycles of emerging displacement technologies that change society, the economy and the stock market.
So this is an especially exciting time in the history of the stock market to be teaching trading and investing, during a major shift I have been preparing my students for over the last few years.
The stock market is rallying to new highs as a NEW Bull Market is underway. There will be minor retracements from time to time, but the long-term uptrend has begun.
The Bull Market Cycles of the past have lasted about 13 years. Cycle experts believe this Bull Market will last longer because there are over 20 new technologies moving into the Market Acceptance Phase all around the same time. It’s not just Artificial Intelligence. Several new technologies are changing the economy of the US to a DIGITAL Economy, the first in the history of all the various economic types.
A Digital Economy derives its primary growth and expansion not from manufacturing, not from consumer buying of products and services, but from the STOCK MARKET. In this new economy, the middle class may get left behind if they don’t learn how to use trading and investments to maintain and build wealth.
See the attached NASDAQ:IXIC NASDAQ Composite Chart that shows the long-term bull market cycles of this index using the DPO indicator on a monthly scale. The Cycles show:
the topping and Peak of the 2009–2020 Bull Market.
a second extreme Peak in 2021 after the speculative run up out of the shortest bear market in history due to the Covid-19 Pandemic.
the intermediate term correction in 2022.
and now a new Trough is completed for the beginning of the next Bull Market.
The Bull Market of the late 1980s to the year 2000 was extremely steep for the NASDAQ, as it had the 6 new technology industry stocks of that time as components.
The Bull Market of 2003–2008 was not a new technology market period but a Real Estate Market boom, so the NASDAQ had minimal gains.
The Bull Market of 2009–2020 was created by the new technology of the Cloud, Platform as a Service (PaaS), Software as a Service (SaaS), the Internet of Everything (IoE), sensors, semiconductors, electronics, and more.
This next Bull Market has 20+ new technologies. When there are new technologies coming to market, there are the best opportunities for trading and investing in the stock market.
PLUS, there is always a silver lining to a global pandemic cycle, and that is the empirical historical fact that after every major pandemic, there is a growth era of new technologies, new social reforms, and new approaches to problems that lead to widespread economic prosperity.
A pandemic is very similar to a World War in its impact on social norms, health, government, the distribution of wealth, education, and individual identity.
Most of the 140 industries in the US financial markets will be impacted by a huge number of displacement technologies. These are far more extensive and disruptive than in the new technology era of the 1980s–1990s.
Learning about these new technologies will help you trade or invest in stocks with knowledge and confidence in the next long-term Bull Market.
How many of the 20+ new technologies coming to market can YOU name?
The stocks of companies who are working on or using these new technologies and that are poised for dominance in the next bull market cycle will have Dark Pool accumulation patterns concentrated at the trough of the next upward cycle. So I've referenced some of the posts where I've featured these patterns below.
Trade Wisely,
