The Market Approaches a Top – What Can Be Expected?

Recently, I discussed reasons our economy would go through a major downturn.[1] My study of major bear markets[2] indicates that after a market top and drop, including the one we now have experienced since January 21, there is a second top coming within -2. 6% and +2. 9% of the first. This kind of marks the start of a major bear market. Having came at the traditional leading range, what can we reasonably expect moving ahead? Michael Berookim

What follows is an index of market patterns for each and every major bear market since 1929 that, like ours, was preceded by a correction. You will find half a dozen of them starting in 1929, 1937, 1946, 69, 2000, and 2007. A.M BEST data can be used for the 1968, 2000, and 3 years ago bear markets. Dow Smith closing data[3] was used for all bear markets before that. 

1929
The most significant drops for this market were (trading days from the peak given in parentheses) 13. 5%(12), 11. 7%(13), 9. 9%(17), 6. 8%(20), and 6. 3%(9). The 30-day average change was -1. 07%. By trading day 10 the % loss was 15. 1%. By day 30 it was 31. 0%.

1937
The major drops for this market were 5. 0%(18), 4. 5%(15), 4. 3%(28), 4. 1%(24), and 3. 1%(20). The 30-day average change was -0. 68%. By trading-day 12 the % loss was 6. 0%. By day 30 it was 20. 1%.

1946
The major drops for this market were 2. 5%(15), you ) 2%(13), 1. 0%(30), 0. 95%(14), and zero. 77%(8). The 30-day average change was -0. 13%. By trading day 12 the % loss was 0. 9%. By day 30 it was 3. 9%.

late 1960s
The major drops with this market were 1. 4%(19), zero. 92%(3), 0. 90%(17), zero. 89%(4), and 0. 77%(18). The 30-day average change was -0. 29%. Simply by trading day 10 the % loss was installation payments on your seven percent. By day 30 it was 8. 4%.

2k
The most significant drops for this market were payment payments on your 6%(28), 1. 9%(24), 1 ) 6%(27), 1. 5%(19), and 1. 4%(10). The 30-day average change was -0. 33%. By trading day 10 the % damage was 5. 0%. Simply by day 30 it was 9. 6%.

2007
The major drops for this market were 2. 9%(10), 2. 6%(15), 2. 5%(6), 1. 8%(27), and one particular. 6%(29). The 30-day average change was -0. 24%. By trading-day 10 the % loss was 2. 6%. By day 40 it was 7. 3%.

All the bear marketplaces declined little by little for the first week. In reality, it was rare to find a substantial drop during that first week. Aside from 1969, none of the major percentage drops took place during the first days and those were only 0. 92% and 0. 89%. Marketplaces did get started to curve during the second week with the 1929, 1937, and 2000 markets shedding 15. 1%, 6. 0%, and 5. 0%, correspondingly, after 10 trading times.

Leave a Reply

Your email address will not be published. Required fields are marked *