The only modern comparable to now is 1987
- fell 20% in one day, rose 15% the next 2 days, then returned to the low the following week
- Then rose 15% again and then retested the original low 6 weeks later
- It was up 25% a year later and back at prior highs 2 years later
- fell 20% in one day, rose 15% the next 2 days, then returned to the low the following week
- Then rose 15% again and then retested the original low 6 weeks later
- It was up 25% a year later and back at prior highs 2 years later
Yesterday, worst 1 day drop for and in their history, and ATH closing high. Wild guess: that was ‘Panic’. ‘Discouragement’ requires time and a failed bounce. 1987 was similar to this (scroll up). Chart h/t @hmeisler
Since the 2/19 top, hasn’t been up on consecutive days. But, the low close so far was Monday. Still looks like the ‘panic’ phase has completed. See chart above. This should now bounce enough to make you think the low is in.
Then ‘discouragement’ retests the low. 70 yrs of bear market charts follow. Pay attention to the ones that fell way more than 20% - 1946, 1961, 1968, 1973, 1980, 1987, 2000, 2007 - to see how each had a complex bottom before it ended.
20010-present. Complex low in 2011. The only exception you’ll see in all these charts is Dec 2018, but it was also shy of -20%. We’re now down 29% without any zig zag since the top
1998-2009. All had a complex bottom
1980-90. Again, 1987 is most similar to today, so note the bottoming process discussed in the past week - it took about 6 weeks to finalize
1968-76. These were both big drops well over -20%
1960-67. Same story here. 1962 also similar in speed to now
1953-60. Not a big bear market but a complex bottom
Last one: 1945-51. The drop in mid-46 also similar to today - a knife.
5-d and 10-d equity only put/call ratios have never in the past 15 years been higher than now. One month has been higher only 3 other times, all in 2008. Here’s what did next (small sample)
