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Friday, September 19, 2008

Bear Market Statistics - Bob Brinker Still Fully Invested

2007-2008 Bear Market Statistics 09/19/08

I read the average bear market, including the great depression, drops 30%. We were off 28.1% this week so perhaps the market gods are feeling average and the worst is over. I was a buyer Wednesday, Thursday and Friday using dry powder.

S&P500 Chart
Last Market High 10/11/07 at 1,576.09
Last Market low 09/18/08 at 1,133.50
Current S&P500 Price 1,255.08
Decline in Points = 321.01
Decline in percent = 20.4%
Max Decline = 28.1%
=>This means the decline from intraday high to intraday low is 28.1% and we are currently 20.4% off the peak.
=>The decline in the S&P500 from the closing high to the closing low was 26.1%
Click chart courtesy of stockcharts.com for full size image
DJIA Charts
Last Market High 10/11/07 at 14,279.96
Last Market Low 09/18/08 at 10,403.75
Current DJIA Price 11,388.44
Decline in Points = 2,891.52
Decline in percent = 20.2%
Max Decline = 27.1%

=>This means the decline from high to low has been 27.1% and we are currently 20.2% off the peak.
=>The decline in the DOW off the closing high to the closing low was 25.1%

NASDAQ Charts
Last Market High 10/31/07 at 2,861.51
Last Market Low 09/18/08 at 2,070.22
Current NASDAQ Price 2,273.90
Decline in Points = 587.61
Decline in percent = 20.5%
Max Decline = 27.7%
=>This means the decline from intraday high to intraday low is 27.7% and we are currently 0.205349623 20.5% off the peak.
=>The decline in the NASDAQ off the closing high to the closing low was 26.6%

I was a buyer Wednesday, Thursday and Friday. To learn what I bought for my newsletter explore portfolio, subscribe now!

2 comments:

  1. Greetings Kirk,

    Your comments regarding bear markets are very interesting since most people don't know or realize one of the origins to this 30% definition of a bear market. The nice thing about what you said is that bear markets are around 30%. Why does this resonate with me? Because so many market observers on television pick arbitrary levels and call them "bear markets." I'm certainly glad that your research yields more market truths than wishful thinking.

    The definition of a bear market was posited by Charles H. Dow in his observations of the markets in the mid-1800s. Of course, Dow is the co-founder of the Wall Street Journal and won the battle of the stock indexes with the Dow Jones industrial Index beating out the other forgettable indices of that era. After Dow's death, S.A. Nelson paid tribute to Dow's economic and market insight by calling his works a theory on the economy and markets. Although discredited by some, Dow's Theory is quite useful for determining the overall direction of individual stocks and various market indexes.

    According to Dow's Theory this market has three support levels which are broken up into thirds.

    1st is 11,864.60
    2nd is 9,531.11
    3rd is 7,197.60

    The violation of the first level is consider the "true" bear market. The 2nd level is considered the expected end of the bear market and the 3rd level is considered the worst case scenario bear market anything below the 3rd levels is considered "all bets are off" territory.

    Also, I liked your question of how many times can Brinker give "buy" recommendations when a person is supposed to be fully invested? I have experienced a similar dilemma when making research recommendations.

    Enjoyed your blog...Thanks.

    Touc

    ReplyDelete
  2. Thanks for your comments and the support levels according to Dow Theory Touc.

    If you click the links for the markets [S&P500 Charts, DJIA Charts , NASDAQ Charts , NYSE Composite Charts , Russell 2000 Charts , Russell 3000 Charts , and Wilshire 5000 Charts ] you see I have the 200 day moving average (DMA) shown. One indication of a bear market is when the 200 DMA turns from support to resistance.

    The charts show this happened in the first half of this year before the markets fell the "20% number" Brinker and many on TV use. That was my key to be more aggressive taking profits in the rallies and be more patient buying the dips when I "rebalance" to take advantage of volatility for added return.

    ReplyDelete

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