Wednesday, 25 March 2009 05:00

Bear Market Rallies Shake Out Weak Hands!

The title says it all, but at the end of the day (or more accurately, at the end of the week and a half -on average), they are still just bear market rallies).


We have identified 5 bear market rallies based on 3-day , 5 -day, 7 day and 10 day cumulative return. On an average bear market rallies last for 9 days with an average gain of 16% from trough-to-peak.This most recent bear rally run has been the most violent, and the largest single move in the history of the markets. That means that it is a possibility the bear market is over - not! I have run multiple scenario analyses, though, just to be sure.

Bear market rallies

Start date

End date

Number of days

% Change


1


9-Mar-09


23-Mar-09


11.0


21.6%


2


20-Jan-09


28-Jan-09


7.0


8.6%


3


20-Nov-08


8-Dec-08


12.0


20.9%


4


27-Oct-08


4-Nov-08


7.0


18.5%


5


10-Oct-08


20-Oct-08


7.0


9.6%


Average


8.8


15.8%

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Last modified on Wednesday, 25 March 2009 05:00