The S&P 500 is now up 51.68% in the 165 calendar days since its March 9th closing low. Below we highlight all "official" bull markets for the S&P 500 since 1927 (a rally of at least 20% that was preceded by a decline of at least 20% is considered a bull market).
Many bears believe the recent gains are just a rally within a longer-term downtrend. But the argument that we'll eventually head lower than the March lows is becoming a harder and harder sell. One argument the bears use is that we saw a number of similar bear market rallies that were this extreme during the overall 86% decline that the market saw from September 1929 to June 1932. However, as shown in the table below, the current rally is now bigger and longer than any of the rallies seen during the 1929 to 1932 crash. The biggest rally during the '29 to '32 period was 46.77% over 148 days. The current rally is up 51.68% over 165 calendar days.
Why doesn't the 112% rally from 1932 count as a bear market rally? Was the bear really over then?
Posted by: Greg Feirman | August 24, 2009 at 02:42 PM
Greg, While the market had more bears throughout the 30s, the 1932 bottom was the ultimate low. It would be similar to the March low if we don't go lower than that obviously. If we're comparing the two, the question now is does the current rally go up 112% like it did following the ultimate bottom in 1932.
Posted by: Justin | August 24, 2009 at 05:21 PM