Cramer examines bull for signs of aging

Bull market always has skeptics: Cramer

(Click for video linked to a searchable transcript of this Mad Money segment)

Considering the current bull market began more than four years ago, Jim Cramer thinks it's only prudent to step back and consider how much longer it can keep going.

By most accounts, the current bull market began on March 9, 2009, when stocks finally began their long march higher after the worst plunge since the Great Depression.

Since that time, the general trajectory of the market has been upward.

Pros such as Cramer would say stocks have been in a bull market since that time.

(Read more: Why are optimists called bulls?)

Adam Jeffery | CNBC

However, the typical bull market doesn't last this long. According to financial planner Kent Thune, over the past 80 years the average bull market has lasted 3.8 years.

We're above average right now. Should you cash out and run for cover?

Before you head into the nearest bunker, Cramer suggests looking at critical elements that make up a bull market:

1. A bull market has a legion of skeptics who fight it all the way. "That is, negativity must surface regularly, it's an integral part of a market going higher," Cramer said.

Otherwise there are too many people on one side and it creates irrational exuberance.

Looking at this bull, Cramer is still seeing plenty of naysayers. "I saw it in spades yesterday, and I heard it last week when someone was saying to me, that this tech wreck happening right now and its killing me," Cramer said.

2. Bull markets are stoked by a compliant Fed that often wants the stock market higher to build up the wealth effect. Although the Fed may introduce tapering, its current initiatives should generate modest inflation, an important part of the wealth effect.

Remember modest inflation is positive. "Inflation creates higher existing home sale prices which is excellent news for a string of home improvement retailers, appliance makers, paint sellers and more," Cramer explained.

3. All happy bull markets require low expectations on either sales or bottom lines. "That is, in a bull market companies need to beat some aspect of their earnings so they can guide to higher estimates," Cramer said. It's a virtuous spiral higher.

According to Bespoke, as of Oct. 30, the current earnings-beat rate for companies that reported was just above 60%.

Therefore, more companies than less have surprised to the upside.

4. In a happy bull market, there is always something to like, always something new and different. "Shopping for stocks in a bull market is like shopping for goods in a Costco, there's always something exciting, something worth sampling, that comes with a decent price attached to it," Cramer said.

And the "Mad Money" host sees plenty of things to like in pockets of the market right now. Whether it's or just better than expected news from JCPenney, there are still new reasons for optimism.

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Although Cramer always thinks a shrewd investors takes profits, he doesn't think the bull is nearly over.

True this bull is older than average, but after digging down into the market, Cramer doesn't see any serious signs of aging.

Call Cramer: 1-800-743-CNBC

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