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Wednesday, December 10, 2008

New Bull Market Starts After the 3rd Worst Bear Market Since 1927

The S&P500 officially started a new bull market following the 3rd Worst Bear Market Since 1927. It is too bad Bob Brinker was fully invested at the very top but the good news is he has been fully invested for this new bull market.

As shown, the bear market that ran from 10/9/07 to 11/20/08 is the third worst ever with a decline of 51.93%. The bears that ended in June of 1932 (-61.81%) and March of 1938 (-54.47%) are the only two that had bigger declines without a rally of 20%.
The good news is the S&P 500 is finally up 20% off the recent lows of November 21, 2008. This means we are currently in a new bull market as defined as a 20% rally after a 20% or more decline.

Markets Since 11-21-08 Lows


  1. New bull market? I think you just jinxed us as it looks like were heading down to retest the November lows.

  2. After gaining 20% in such a short time, a retrace of 50 to 75% would not only be expected, but healthy. A correction into next Friday's options expiration would get my short term timing indicators back to neutral from over bought, but that is not something I'd bet your farm on.

  3. Kirk,

    The debate continues. Yes you may get a bounce off the recent lows that may last a few months. But the secular bear market, which began in 2000, is far from over. Mark my prediction: DOW 4,000 at the ultimate lows.


  4. Hi Fred (permabear)

    Good to hear from you.

    Congratulations on your correct call that we were going much lower than a correction and the US was in trouble with debt.

    I believe your target of 4,000 on the DOW uses century long support lines to connect past lows that include the low of the depression. My belief is Bernanke and the other global central bankers have learned that you can avoid this sort of pain by printing money and inflating the global economy out of recessions to avoid depressions. I believe they will be successful and have been investing accordingly.


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