Tuesday, July 28, 2009

Over Look At 2000-2003 Bear Market

S&P500 Chart:
I'd like to point the most recent bear market that most likely you are very familiar. Obviously the current bear market is much worst than 2000-2003 bear market, to me this bear market is very similar to 1929 or 1937 bear markets, but it would be suitable for you to refresh your memory.
During the 2000-2003 bear market, the S&P500 made 9 significant drives lower and 7 bear market rallies. The average decline was about 18.85% and the average rally was about 17.40% which means the market recovered an average of 73.06% of the prior loss. The speed and magnitude of the rallies in a bear market are quite seductive. In my opinion being early is just not worth the risk, because no one knows when are we going to hit the bottom.
when I take a close look at the S&P500 chart I can not convince myself that bear market is over.

2000-2003 Bear Market
Declines:___ Rallies:
1) ~14% _____~11%
2) ~16.5%____~15%
3) ~22%_____~22%
4) ~29%_____~26%
5) ~9%______~9.5%
6) ~11%_____~25%
7) ~30%_____~24%
8) ~20.5%
9) ~17%