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And, in an interview, he said that for the short term, investors who are "overwhelmingly exuberant" are propelling a cyclical bull market.
But it is telling clients that a cyclical bull market is in place — a strong upturn within the longer downward trend.
"It's typical of the first thrust of a cyclical bull market," said Steven C. Leuthold, the chairman of Leuthold Weeden Capital Management in Minneapolis.
Such prolonged rallies do not continue indefinitely.Chris Watling of Longview Economics says that this is a classic "phase two" of a cyclical bull market, in which investors take stock after an initial rally.
Q. Do you see the start of another long-term upward move in stock prices, or a cyclical rally? A. This is the start of a cyclical bull market, which usually runs for 18 to 24 months.
"For the stock market the Federal Reserve is the big wild card," said Ed Clissold, United States market strategist at Ned Davis Research in Venice, Fla ."As long as the Fed and the other central banks keep pumping liquidity into the economy, our base case is that the cyclical bull market in stocks can continue".
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TO be sure, there are different types of bull markets — so-called cyclical bulls that tend to run alongside a single economic expansion, as well as so-called secular bull markets that may last for more than a decade, often containing shorter bull and bear cycles within them.
And when we did that, in the early '60s, we clearly noticed that it was the first important recession period we were seeing, and we saw bear markets and cyclical stocks, and bull markets in a stock like Polaroid and Xerox.
"You can have cyclical bear markets within bull markets, and with valuations stretched there is a risk of that," he warned.
Chinese demand for raw materials of all sorts is growing so fast and creating such a bonanza for farmers, miners and oilmen that phrases such as "bull market" or "cyclical expansion" do not seem to do it justice (see special report).
As every action movie needs a hero, every cyclical bear market needs its bull.
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