Back to www.cobrasmarketview.com |
The S&P 500 averted a bear market Friday, trimming losses to finish flat after trading solidly below a key threshold. But history shows that when a bear arrives, it tends to stick around awhile.
The large-cap U.S. benchmark SPX, +0.01% ended the session with a gain of less than a point at 3,901.36 after trading as low as 3,810.32. A close below 3,837.25 would mark a 20% pullback from the S&P 500’s Jan. 3 record finish, meeting the traditional definition of a bear market, according to Dow Jones Market Data.
The Dow Jones Industrial Average DJIA, +0.03% erased a 617 point loss to end the day at 31,261.90. A finish below 29,439.72 would put the blue-chip gauge into a bear market.
As baseball Hall of Fame player, Yogi Berra, said: ''Predictions are hard, especially about the future.'' Ha ha.To be sure, many investors and analysts see that 20% definition as an overly formal if not outdated metric, arguing that stocks have been behaving in bear-like fashion for weeks.
And note, that if the S&P 500 were to close below the threshold in the coming days, the start of the bear market would be backdated to the Jan. 3 peak. A bear market is declared over once the S&P 500 has risen 20% from a low.
OK, so what does history say about what happens once a bear market begins?
Huge, long-lasting bull market runs out of steam. Scheis happens in the world. Markets contract. Normal, although seemingly more extreme, at this time.There have been 17 bear —- or near-bear—- markets since World War II, said Ryan Detrick, chief market strategist for LPL Financial, in a Wednesday note. Generally speaking, the S&P 500 has fallen further once a bear market begins. And, he said, bear markets have, on average, lasted about a year, producing an average peak-to-trough decline of just shy of 30%.
jademann wrote:Kool, why do think the bear ends in july? A typical bear lasts 9 months and this one should be worse than an average one because the FED pumped for way too many years. I am old enough to remember how difficult And long it was to stop inflation. FED printing caused it.
Heres an interesting statistic i just ran across! July is 7 months! Also, note that 23.8%= about 3680, and im expecting around 3525 " There are bad bear markets, and then there are less bad bear markets. What distinguishes the two is whether or not the economy enters akoolblue wrote:jademann wrote:Kool, why do think the bear ends in july? A typical bear lasts 9 months and this one should be worse than an average one because the FED pumped for way too many years. I am old enough to remember how difficult And long it was to stop inflation. FED printing caused it.