The Dow Jones Industrial Average (DJIA) is down for the third straight day. News outlets that have to attribute it to something attribute it to “global tension,” which does appear to be running a bit higher than usual. But the entire exercise of watching an index from one day to the next is a bit silly from the start.

A more interesting question asked by some commentators is, “Does this mean that the bull market is over?” The short answer is no, it doesn’t, but not for the reasons that most people think. The reality is that we have been in a secular (or long term) bear market since 2000, roughly the start of what we call a “Managed Depression,” and this small correction is nothing but a regression to the mean that proves it.

The good numbers are always buried.

It’s important to note that the DJIA or any other average isn’t exactly real money, but “points” – a system of averaging out effects like stock splits and substitutions of new companies into the index. Treating it just like real money is, well, pointless (haha!). But we can reasonably expect a stock index to go up and down with inflation, allowing us to do some math to see what the real gain is.

Let’s start with what the big picture looks like, shown here from year 2000 to today. It’s hard to see a lot of progress until very recently, with an apparent bull market of a sort picking up steam sometime around 2012:

DJIA since 2000, from Yahoo Finance

If we look at the highs, we can see how weak it really is. In 2000 it peaked at 11,723. The next peak is in October 2007 at 14,903, showing that the market was indeed turning south a year before the fall of Lehman. The recent peak of 17,138 came just a month ago, and it has fallen 4.1% since then to 16,429.

Sounds like progress? Adjust those previous peaks for inflation, and you have a 2000 high that is the equivalent of 16,224 today. And the 2007 peak is the equivalent of about 16,207. That’s about where we are now, and it suggests that if anything the DJIA will give back another 200 points or so.

This is what we call a “secular bear market”, or a market that produces nearly zero return for so long it appears permanent. In this case, the only reason the DJIA looks like a bull is that it took a terrible dive from 2007 on. But what we’ve recovered is really just getting back to even once it’s adjusted for inflation. Here is a much longer view, showing the boom and bust cycles since 1871:

Since 1871, it’s been all booms and busts

This is the nature of Secular Market Theory, which is more or less the simplified version of Kondratieff Waves. The market has periods of rapid gain followed by pauses or even downturns. The periods of these mark what we call “generations”, currently 17 years long – which is to say substantially less than an actual generation, given that a mother’s age at childbirth is now 30 on average.

Not everyone can do this.

What can we learn by watching the stock market so closely? The short answer is that it really is a pointless exercise. A longer view illuminates what is happening much more clearly. We are in a range that shows that this is still not out of the range where we could call the bear market of the last 14 years over, much less establishing this as a solid bull. A real breakout would be a DJIA much higher, and as we can all see it turned south very shortly after establishing a genuine inflation adjusted new high sometime in June 2014.

Is the bull market over? You haven’t seen anything yet. That won’t be truly set up for another two years or so at this rate. And that takes us into 2017, roughly the year that the secular bear market should end if these things run entirely like clockwork. They don’t, not really – but … they do, sort of.