Let's check in on how the third year of this bull market is progressing.
Here’s the chart:
Let's break down what the chart shows:
The light blue line represents the performance of an average first year during a bull market for the S&P 500. The dark blue line illustrates the performance of the first year of the current bull market for the S&P 500.
The light gray line indicates the performance of an average second year within a bull market for the S&P 500, while the dark gray line shows the performance of the second year of the current bull market.
The light red line depicts the performance of an average third year during a bull market for the S&P 500, and the dark red line represents the performance of the third year of the current bull market for the S&P 500.
The Takeaway: By my definition, a bull market starts with a 20% rally after a 20% drop. Based on that, we’re still in a bull market that began in late 2022.
The pullback from mid-February to April 8, 2025, was sharp… down -18.9%. But that’s still above the -20% drawdown level that would signal a bear market.
We’re now 153 trading days into the third year. The S&P 500 index is up just over 1% in the past seven months. That’s flat. Historically, year three of a bull market is often quiet. So far, that’s exactly what we’re getting… but perhaps with some extra volatility this time.
But, people repeat behavior. That’s why market cycles often rhyme.
This bull market run has lasted 657 trading days and has gained over 67%. That’s strong. But patterns show that after two solid years, the market tends to cool off in year three. And that’s what we’re seeing now… more noise, less trend.
Historically, however, the fourth year tends to show a resurgence in strength.
But for now, flat might just be part of the plan until we start year four of the bull market.
Grant Hawkridge | Chief Aussie Operator, All Star Charts
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