"Charles H. Dow, the founder of the Wall Street Journal and keen observer of the stock market, identified three time scales of market action. Primary trends are broad movements that usually last 4-6 years. So long as each successive rally reaches a higher level than the one before and each correction stops at a higher level than the one before, the primary trend is up and we are in a bull market. Conversely, when each intermediate decline carries prices to successively lower levels, and each intervening rally fails to exceed the top of the previous rally, the primary trend is down and we are in a bear market. The major advance in the market that started in spring 1995 is an example of a primary trend or bull market.

Secondary trends are the corrections and rallies during bull markets or the declines and counter rallies during bear markets. Normally, they last from a few weeks to a few months. The rally from October 1998 to April 1999 is an example of a secondary trend. The minor trends are short-term movements that usually last less than a week. A host of technical analysis tools have been developed to deal with stock movements at all three time scales.

This article deals with very long-term, or secular trends. Secular trends typically last 5-20 years and consist of one or more primary trends in sequence. As long as each successive bull market high and each bear market low (expressed in constant dollars) is higher than the previous one, we are in a secular bull market. The converse is a secular bear market. Today, we are in the midst of secular bull market that started in August of 1982. "  »»» Click Here For More