Ride with us now back to the summer of 1982. United States unemployment is around 10 percent, and recession-level economic indicators are as still as an August noon. Things are so slow that the Federal Reserve is cutting interest rates to try to perk up the economy. Suddenly, in mid-August, the bull charges. During the week of Aug. 20 the Dow Jones industrial average rises a record 81.24 points, reaching 869.29. Ever since then, in fits and starts, Wall Street has enjoyed a major bull market.
But every four years, according to the charts, the stock market completes a cycle. So if that is true, before we bid it adieu in 1986 here is a brief curriculum vitae of the current bull market.
Boom times -- fall 1982 to mid-'83: After the big August rally, led by high-tech issues, the market levels off for a couple of months. Interest rates keep falling. It forges ahead in November to a record 1,039.28. By the way, November 1982 becomes the month in which, according to the Department of Commerce, the recession ended; the stock market once again proves accurate in foreshadowing the economy.
The Dow rises fairly steadily through the spring of '83, but then interest rates start to edge up again.
The correction -- summer 1983 to summer '84: On June 16 the Dow hits a high of 1,248.30. But those pistol-hot high-tech stocks cool off. This sector begins a sustained ``correction.'' Blue chip Dow stocks slow down, too. The market sloshes around until November, when, on the 29th, the Dow manages a record high of 1,289. But it slides into a correction through the first half of '84 and hits perigees of 1,086.90 on June 15 and 1,086.57 on July 24.
The rally -- summer 1984 to present. With widespread bearishness, the market is set for a big recovery. In August it forges ahead, accelerating more than 100 points in three weeks. The rest of '84 is OK, but nothing spectacular. The new year begins with the Dow at 1,198.87.
From there, however, a sustained rally takes place, driving the Dow past 1,300 in late February. It hits a plateau between late April and late July and advances 140 points to a record high of 1,372.20.
That record still stands. In recent weeks the Dow has been rather unexciting. Overall, it's a little longer in the tooth than it was three years ago, but the old bovine is still a respectable 450 points ahead of where it began its charge. CHART: The bull market 1982 to present Dow Jones industrials
900 1,000 1,100 1,200 1,300 1,400 1,500 1982
'86 Bull market begins High-tech stocks slump Marines killed in Beirut Mondale-Ferraro ticket Marines quit Beirut Second Reagan inaugural Dollar intervention