Steven Leuthold and Doug Ramsey of Leuthold Weeden Capital Management say that, despite what some major U.S. indices say, we are in a bear market for equities. But, they also think that we may be very close to the end of it.

“We haven’t reached the technical definition of a bear market on the Dow or the S&P, which would be a 20% decline, and so there is still debate as to whether this is a cyclical bear market, which we strongly believe it is, or just a serious correction,” Ramsey says in a joint interview with Leuthold in Barron’s. “If you broaden your perspective to include markets outside the Dow and the S&P it is very, very clearly a bear market. The typical stock is down 20 to 35%. Some of the financial groups, the brokers and the banks, are down 35% to 40%. The S&P 500 High Beta Index is off 35% from its peak.”

The good news, however, is that this seems to be a “noneconomic bear market” — one not directly associated with a recession — Ramsey says. “This overall cyclical bear market could be in the seventh or maybe the eighth inning,” he contends. “While the typical noneconomic bear market is almost as great in magnitude, at 27% versus 30% for the economic bear market, the positive news is that the typical noneconomic bear market is much shorter. It tends to last six months, compared with 18 months for recession-related ones. Since the peak at the end of April, we are five months into it.”

Leuthold and Ramsey use a “major trend index” to adjust their asset allocation, and in August they reduced net equity exposure to about 33%. They also look at a variety of “intrinsic value” measures. Leuthold says that if the S&P 500 were to fall into the 950-980 range, it would be “historically be a good time to start buying stocks, even if the major trend index remained negative.”

Ramsey also talks about why he thinks bonds are “an accident waiting to happen”; why he’s high on several stocks in the healthcare sector; and why he thinks tech stocks could be a leader in the next bull market — which he says, “we could witness the beginning of … within the next month.”