Monday, September 29, 2008

Measuring the Bear


Current Market Statistics:

o S&P 500 High October 11, 2007 was 1,579
o Today's Close was 1,106 and change
o Point Difference -473 points
o Percentage Loss -29.96%
o Percent Increase Required to Reach prior Highs +42.77%
o Twelve Months Duration

o Dow High October 9, 2007 was 14,164
o Today's Close was 10,365 and change
o Point Difference -3,799 points
o Percentage Loss -26.82%
o Percent Increase Required to Reach prior Highs +36.65%

Past Bear Markets Peak to Trough (Dow):

1900 32% 12 months
1903 38% 10 months
1907 45% 10 months
1909 26% 8 months
1912 24% 26 months
1917 40% 13 months
1919 47% 21 months
1923 19% 7 months
1926 17% 2 months
1929 90% 34 months
1934 24% 9 months
1937 52% 56 months
1946 25% 37 months
1953 14% 9 months
1957 20% 6 months
1960 18% 10 months
1962 29% 6 months
1966 26% 8 months
1969 36% 17 months
1973 46% 22 months
1976 27% 17 months
1980 24% 20 months
1987 36% 2 months
1990 21% 3 months
1998 16% 2 months
2000 34% 30 months

Source: Trulaske, Missouri

Quick Conclusion: We could have further to go in the months ahead, particularly if earnings and/or guidance disappoint next month. I increasingly suspect they will as 2009 estimates remain relatively optimistic.

[ADD: Reading this the next morning... I feel a bit like the ratings agencies... changing their forecast after things look to be their worst! Still, I am concerned about those earnings. Oh, and I don't mean to imply we aren't due a bounce this week. I am actively playing one myself (and trailing stops along the way).]

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