S&P500 Down 53% In Worst Bear Market Since Great Depression

All three major indexes are now officially 50% or more off their peak values made in 2007. This chart appears to include dividends reinvested to calculate how far the markets are down. The raw data below this graph uses actual trading data to calculate raw index returns, before dividends. No matter how you slice it, the bear market has been brutal to stock market investors.

Click for full size image

S&P500 Chart

Last Market High 10/11/07 at 1,576.09
Last Market low 02/27/09 at 734.52
Current S&P500 Price 735.09
Decline in Points = 841.00
Decline in percent = 53.4%
Max Decline = 53.4%

• =>This means the decline from intraday high to intraday low is 53.4% and we are currently 53.4% off the peak.

• =>The decline in the S&P500 from the closing high to the closing low was 53.0%

DJIA Charts

Last Market High 10/11/07 at 14,279.96
Last Market Low 02/27/09 at 7,033.62
Current DJIA Price 7,062.93
Decline in Points = 7,217.03
Decline in percent = 50.5%
Max Decline = 50.7%

• =>This means the decline from high to low has been 50.7% and we are currently 50.5% off the peak.
  
  
• =>The decline in the DOW off the closing high to the closing low was 50.1%

NASDAQ Charts

Last Market High 10/31/07 at 2,861.51
Last Market Low 11/21/08 at 1,295.35
Current NASDAQ Price 1,377.84
Decline in Points = 1,483.67
Decline in percent = 51.8%
Max Decline = 54.7%

• =>This means the decline from intraday high to intraday low is 54.7% and we are currently 51.8% off the peak.

• =>The decline in the NASDAQ off the closing high to the closing low was 54.0%

Bob Brinker has been fully invested for the full ride down. Worse yet, he was more bullish at the top than he was in March 2003 when he returned to fully invested after reducing his exposure to equities between January 2000 and March 2003. That is in March 2003 Brinker said we were in a secular bear market but in his June 2007 Marketimer he said the secular bear market that began in 2000 had ended in June 2006 (don't ask me how he came up with that crazy calculation.)

=> June 2007: Declared that a secular bear which he said began in March, 2000 had ended in June, 2006. Below is his "buy signal" history:

=> Aug 16, 2007 - January 4, 2008 @ 1411: Mid-1400's. Called it a “Gift Horse Buying Opportunity,” a term reserved in the past for only his very best buys. Brinker did not call his March 2003 “return to fully invested” recommendation with the S&P500 at 808 a “gift horse Buy” because then he thought we were in a secular bear markets.
=> January 20th, 2008 -- rescinded mid-1400's (recommended dollar-cost-average only)
=> Feb 10, 2008 @ 1331: Low-1300's
=> Aug 5, 2008 @ 1285: 1240 or less
=> Sept 2, 2008 @ 1282: Low-to-mid 1200's
=> September 16th -- rescinded low-to-mid 1200's (recommends dollar cost-average only)
=> January 15, 2009 – low-to-mid 800’s

This chart, courtesy of stockcharts.com shows the buy signals graphically.

Click for full size image

With any amount of luck, we are currently testing the November 2008 lows. Unlike Brinker, I have cash reserves and have been nibbling at stocks again near these lows. Since I have been buying down here, I will have something to show for the pain of this decline should the markets recover later this as Brinker predicts. Even if they go lower, it is less pain than being fully invested at the top, riding the markets down over 50% fully invested and not having any "portfolio cash" to put into the market.

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Successful Bottom Test; Day #1

As of today, we successfully tested the November 2008 low in the S&P500 at 741.02.

Click chart courtesy of Stockcharts.com for full size image

Hopefully this means November 21, 2008 was the start of a new cyclical bull market and yesterday was a day of fear similar to the low set in March 2003.

In 1999 and 2003, the years following the big downturns in 1998 and 2002, my newsletter explore portfolio gained 117% and 77%, respectively.

Brinker may have missed this bear market as fully invested, but he says he expects big gains to come before the recession ends. If Ben Bernanke is correct (see Fed Chairman Bernanke Said Recession Should End This Year) that the recession can (and does) end later this year, then we should see major gains start any day. NOW would be the time to add some high octane to your portfolio from my list of "explore stocks."

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 94% vs. S&P500 DOWN 14% vs. NASDAQ down 28% vs. Warren Buffett's Berkshire Hathaway (BRKA) up 37% (All through 12/31/08) (More Info)

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BTW, Jim Cramer (Fan Club) is on TV now saying we should get a "big rally" that he thinks is an opportunity to sell before the market goes lower because the fundamentals are terrible. Unlike Brinker who has been fully invested since the top, Cramer told his audience and NBC's "Today Show" national audience to raise 20% cash plus cash for anything you need to buy in the next five years late last year when the markets were about 30% higher.