The Global Bull Market Continues
Market Tops and Bottoms In 2024
Bryan Taylor, Chief Economist, Global Financial Data
Global Financial Data tracks bull and bear markets in over 100 stock markets. GFD has over 400 years of data to analyze when bull and bear markets have begun and ended and the number of market tops and bottoms that have occurred each year worldwide. A market bottom occurs when the index declines by 20% or more after a 50% increase, and a market top occurs when the market rises by 50% or hits a new high after a 20% decline.
Global Bull and Bear Markets
Bear markets occur more quickly than bull markets and over a shorter period of time with higher daily volatility, so their occurrence is quickly noted. However, it may take several years for a market to make the 50% recovery that signifies a bull market, and it is only then that analysts realize that the stock market is benefiting from a new bull market. Otherwise, a market might decline by 25%, rise by 30%, then decline again by another 25% producing one long bear market and not a series of bear markets.
This is what made the 1929-1933 bear market in the United States or the decline in Japan’s stock market between 1989 and 2012 so memorable. There was a decline, a short-term recovery, another decline and another short-term recovery for years. Investors would expect that as the market bounced back the bear was gone, but the bear only reappeared and drove prices further down, ultimately declining by almost 90%.
How significant the market bottom is globally depends upon the number of markets that hit a bottom and begin bull markets. Global markets are integrated, and bear markets often occur across global markets simultaneously. This was seen in the Covid bear market of 2020. Global markets bottomed out within days of each other, started to rise, and never looked back. Since bear markets usually last a year or two and bull markets last five to ten years, a significant number of bear market bottoms can give investors confidence that a new global bull market has begun that they can invest in for several years to come.
Figure 1 shows the number of market tops minus the number of market bottoms in each year since 1850 for all the markets in the world. More market tops show the end of a bull market, and more market bottoms show the end of a bear market.
Figure 1. GFD Total Market Tops Minus Market Bottoms, 1850 to 2024
If you look at Figure 2, the market tops in 1920, 1929, 1937, 1969, 1973, 1987, 2001, 2008, 2016, 2020 and 2022 are clearly visible while in Figure 3 the market bottoms in 1921, 1932, 1940, 1974, 1982, 1987, 1998, 2009, 2020 and 2022 are visible as well. There were fewer market tops and bottoms between 1945 and 1966 as the bull market roared ahead. 
Figure 2. GFD Global Market Tops, 1850 to 2024
The number of tops and bottoms expanded in the 1990s when many emerging markets and former Communist countries opened stock markets, increasing the number of stock markets worldwide. After the market peaked in 2000, it took three years of bear market bottoms for global markets to start moving forward again. 2007 had the largest number of bull market tops in history; however, the number of market bottoms in 2020 when Covid struck exceeded the number of bear market bottoms in either 1998 or 2009. This shows that the degree of integration of global equity markets has increased over time.