$TRAN and $RUT Were Never in a Secular Bear Market, Not Even in Real Terms; $DJIA is Almost at its Previous Highs in Real Terms (*RUT and TRAN are Testing a Critical Long-Term Resistance Level)

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Has the market seriously been in a secular bear market since 2000? First, in nominal terms, according to charts on stockcharts.com, the only index that appears to have been in a secular bear market since 2000 and broke out recently is the S&P 500. We'll see if that breakout ends up failing when/if the Federal Reserve starts to taper QE, or if earnings and the economy start to contract on an unknown catalyst.

The Dow Jones Industrial Average ($DJIA) looks similar, but it made a new cyclical high in every bull market since 2000. It seems like the Dow's peak in 2007 should have officially ended the 25 year secular bull market because it then went on to make a new low in 2009 during the financial crisis. I'm not including the Nasdaq's bubble here because it wasn't the major catalyst that fueled the deleveraging cycle. Here's a look at the S&P and Dow's 20 year chart courtesy of stockcharts.com.

I will also add that the NYSE Primary Exchange Index is testing its 2007 high...

But it gets more interesting when you look at the long-term charts of the Russell 2000 ($RUT) and Dow Jones Transportation Index ($TRAN). Both of these indexes have been trading in a long-term ascending channel (secular uptrend?) since 1995. The low in 1995 on $TRAN's chart was the last support level on its uptrend line from its major secular low in 1982, which ended up getting violated during the 2000-2002 bear market (the beginning of the overall secular bear market). It looks to me like the secular bear market in the transportation index should have started in 2007 (second chart). $RUT is a younger index, its first official low was in 1990

So the point I'm trying to make is that there was never a secular bear market in these indexes, and not even in real terms (more on that below). You can also see that $TRAN and $RUT are testing a critical resistance level in their ascending channels, so a pullback or even a top in the current cyclical bull market looks imminent based on historical activity. But, resistance levels, especially in this era of hyper-monetary inflation, manipulated interest rates and ZIRP, can easily get taken out, so hedge that idea.

Adjusted for inflation (CPI-all items, seasonally adjusted), the Dow Jones Industrial Average ($DJIA) is almost testing ceiling resistance (the two previous peaks) in the real secular bear market. I also included a chart of the inflation adjusted Dow Jones Industrial Index from 1960. 

When looking at the inflation adjusted Dow Jones Transportation Index, it even made a new high in its long-term secular ascending channel. Look at the third chart. The only inflation adjusted chart that looks somewhat normal on a technical basis is the S&P 500 (similar to the nominal chart). It recently broke through its downtrend line from 2000 and is almost testing its 2007 high, but it is still in a secular bear market.

Dow Jones Industrial Average Adjusted for Inflation

Dow Jones Transportation Index Adjusted for Inflation

S&P 500 Adjusted for Inflation