The S&P 500 finally had its first 20%+ rally in 408 days yesterday, which means we're currently in a bull market by the standard definition (20% rally preceded by a 20% decline). Over at Bespoke Premium, we released a B.I.G. Tips report yesterday that highlights what this means for the market going forward, but below we highlight historical bear markets for the S&P 500 since 1927.
As shown, the bear market that ran from 10/9/07 to 11/20/08 is the third worst ever with a decline of 51.93%. The bears that ended in June of 1932 (-61.81%) and March of 1938 (-54.47%) are the only two that had bigger declines without a rally of 20%.
Striking how all the stats on this market are continuously keeping company with the 1930's, isn't it ?
If the market is telling us anything, it's telling us this is Great Depression II.
Posted by: Celal | December 09, 2008 at 11:42 PM
Amazing. 408 days without a 20% pop. Interesting, too, is how voices expressing doubt in the staying power of this rally off November's bottom seem to be widely present. No doubt, this environment really is getting to be quite the freak show. However, the McClellan Oscillator appears nicely positioned for a continuation of the rally off late-November's bottom, though.
It will be interesting to see how the market behaves as indexes approach levels last seen the week Lehman Brothers failed. Some 20 billion shares were exchanged on the NYSE that week, and you have to think most are underwater right now. It seems reasonable once mid-September levels are approached one ought to expect some increased measure of selling to develop. How well shares are absorbed then should give some better indication of what's to follow.
I'm not particularly sanguine. (Yet seeing how this makes 2 out of 2 comments concerned for the financial future, I'll chill for now...)
Posted by: Tom Chechatka | December 10, 2008 at 07:29 PM
These numbers are really shocking. This is a very critical situation, isn't it? the thing in the economy is not just numbers, but also and mainly, what they imply in the real world.
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