Jim Jubak: A longhorn convene in bear marketplace cycle</title>

Is this still a bear market?

Even though stocks, measured by the Standard Poor"s 500 Index ($INX), were up 70% from their March 9, 2009, low to their recent high on Jan. 19?

Yep. Yes indeed. Absolutely.

If by bear market you"re talking about what"s called a secular bear market.

Strong market rallies -- even three- to four-year cyclical bull markets -- can take place inside a longer bear market trend. And despite a bull rally, the long-term trend can still point very strongly down.

I think that"s exactly where we are now: in the midst of a strong cyclical bull rally that"s taking place in a long-term bear market downtrend that began in March 2000 and could have five to 10 more years to run.

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I raise this question and answer it this way not to scare you out of the market. Remember that even if this is just a cyclical bull market rally inside a larger downtrend, such a rally can go on for as long as three or four years (although a cyclical bull is by no means guaranteed to go on for that long). I don"t want you to jump ship just yet. But I think understanding that we"re in a cyclical bull inside a secular bear market is the best way to explain why this stock market feels the way it does, why so many investors still doubt this rally even after a 70% gain and why it has been so hard to go along for the ride.

And that feeling you have that it"s all going to end badly? It"s perfectly normal and likely as not to be correct in the longer term, if this is still a secular bear market.Riding the cycles OK, so what about this "secular" and "cyclical" stuff? How can the current market be both a bear and a bull?

The easiest way to explain that is to take a look at the last great secular market trend, the secular bull market that began in 1982 and ended with a huge thud in March 2000.

On March 26, 1980, the SP 500 Index closed at a low of 98.68. Stocks spent the next two years going first up, to 138.31 by Nov. 24, 1980 -- a 42% gain -- and then back down to 102.42 on Aug. 12. That almost matched the 1980 low. Almost. But instead it was a successful test of that March 1980 low; the August 1982 low wasn"t as low as the 1980 low.

And it marked the beginning of a new secular bull market that would take the SP 500 from that August 1982 low to a high of 1,527.35 on March 23, 2000. That was a gain of 1,391%.

That doesn"t mean that great secular bull market was never interrupted by something that felt very much like a bear market (you know, big teeth, sharp claws, etc.).

For example, from July 20, 1998, to Oct. 7, 1998, the SP 500 Index fell 18%. And from July 13, 1990, to Oct. 11, 1990, the index fell 20%.

Those drops lasted just a few months, and stocks quickly recovered the ground they"d lost. The bull market trend continued.

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But the bull was punctuated by longer and more-vicious bear markets, the most famous of which was the crash of October 1987.

The SP peaked that year at 336.77 in August. It then wobbled for a month, hitting 314.86 on Sept. 16. It righted itself to climb back to 328.08 on Oct. 5 -- and then plunged off a cliff in mid-October. The worst day, Oct. 19, took the SP 500 down to 224.84 in a terrifying 20% drop. Stocks meandered lower into December, when the SP 500 hit 223.92 on Dec. 4, for a 34% drop from the August high.

The stock market then steadily picked up ground off that low. But it still took the SP 500 until July 1989 to match its August 1987 high.

Two years to crash and then recover. But even that didn"t end the secular bull. That great climbing market had more than a decade left to run.

That"s because secular bull and bear markets are built on strong underlying fundamental trends.

What built the bull