Dow's Long Cycles Put AI Selling in a Broader Market Context

By Grace Kim

The Dow Jones Industrial Average did not regain its 1929 peak until 1954, according to Dr_Rabbit_'s TradingView analysis of more than a century of U.S. market history. The long recovery shows why he warns that secular market cycles can outlast investor patience.

Dr_Rabbit_ rejects the assumption that markets rise forever. His history shows how periods of growth can give way to long stretches of stagnation, heavy selling and slow recovery.

His present focus is the AI boom, which has pushed several U.S. technology and semiconductor stocks to remarkable valuations. He says investor interest has been enormous across AI chips, memory, cloud computing and data-center infrastructure.

That enthusiasm has met sharp recent corrections. Nvidia, semiconductor stocks and AI infrastructure companies have experienced heavy selling, even as some companies continue to report strong revenue growth and rising demand.

Dr_Rabbit_ writes: “A fall in AI stocks doesn't automatically mean the entire stock market has entered a long-term bear phase.”

His warning separates a sector correction from a broader market downturn. In his framework, investors must examine the broader index, market participation, company earnings and economic conditions before declaring a long-term bear phase.

What do the Dow's long cycles show?

Dr_Rabbit_ describes more than a century of market history as repeated long-term bull and bear phases, often called secular market cycles. Some have lasted more than a decade.

His chronology starts with the prolonged recovery after the 1929 crash. The Dow then entered a major bull market that continued until the mid-1960s.

From 1966 to 1982, inflation, economic uncertainty and market weakness kept stocks under pressure, according to the analysis. The Dow then began another major change in the 1980s, entering a powerful long-term bull market that continued through the 1990s.

The momentum eventually reversed. Dr_Rabbit_ attributes the difficult period from 2000 to 2010 to contributions from the dot-com crash and the 2008 financial crisis.

He also draws a firm line between a market correction and a long-term bear market. Sometimes, he says, the market needs years to recover and establish a new trend.

Takeaway: A correction can end before a secular trend changes, and a bear market can demand years of recovery.

How long do market cycles usually last?

Dr_Rabbit_ cites several historical studies to put the current debate in context:

• A study of U.S. stock market data from 1926 to 2016 found an average market cycle of approximately seven years, with considerable variation around that average.
• Other research covering more than 200 years identified 62 bear markets and 63 bull markets between 1802 and 2019.
• Average bull markets lasted around 25 months, compared with approximately 17 months for bear markets.

Long-term secular cycles can last 10–20 years or more, according to Dr_Rabbit_. The averages do not create a countdown. He says they do not mean a new bear market must begin after seven years or that every bull market will last two years.

Instead, the figures describe how market phases have behaved historically. The wider ranges matter more than any single average.

Takeaway: Seven years is a historical average, not a deadline for the next turn.

Are we approaching another long cycle?

Dr_Rabbit_ says the current market has already experienced years of growth, particularly in technology and AI. He frames two possible readings of the recent weakness: another correction inside a larger bull market, or the early stages of a longer period of weaker returns.

He says market duration alone cannot resolve that question. Valuations, interest rates, inflation, economic growth and corporate earnings will all play a role, according to his analysis.

Strong bull markets eventually face periods of uncertainty in his reading of history. That does not make the next downturn predictable, but it does make the AI correction one part of a broader market structure rather than a complete diagnosis.

Dr_Rabbit_ sets a different objective: “The goal isn't to predict the exact year of the next crash. It's to understand the bigger market structure and recognize when conditions begin to change.”

The author says extraordinary bull markets have rewarded investors, while years of stagnation have tested their patience. He views understanding long cycles as potentially as important as identifying the next short-term rally.

Takeaway: For now, Dr_Rabbit_'s framework points to the broader index, market participation, company earnings and economic conditions—not AI-sector selling alone—as the tests for a longer downturn.