Four Past Bad Bear Markets - Where Are We Now?

The graph below illustrates four bad bear markets over the last 80 years (from Doug Short, dshort.com, article), including the great depression (based on the Dow), as well as the 1973 oil crisis, 2000 technology crash, and the current 2008 credit/housing sell-off (each based on the S&P). Note: You should be able to click on each image to make them bigger.

Source: dshort.com

The second graph provides more specific return data for the current market, including the various rallies and sell-offs.

Source: dshort.com

When looking over the graphs and comparing to the current downturn to the 1973 and 2000 crashes, some may conclude that we are approaching the end game of the correction. If on the other hand they were to compare to the 1929 crash (graph below), it might be speculated that we may have another correction in the cards before entering into the long climb back from the abyss. Either way, the market certainly seems to be at an interesting point.

Source: dshort.com

Of course, this type of analysis often assumes some correlation/relation between the bear markets. Where it goes from here, and whether it follows the pattern of one of the other larger bear markets is just about any one's guess (even for most of those who claim to know otherwise). Yet, even without history being a perfect guide, it is interesting to see and learn about how things played out in the past. Regardless of their predictive nature, I recommend that you check out the dshort.com site if you have not already done so. There is a lot of good visual data of historical moves, each of which is easy to understand, interesting to look at, and of course fun to speculate about - even if you are not a technician, or someone who trades on past patterns. Most of the charts are updated daily and weekly.