Hold Your Breath Mercier, concentrate on yourself and not others ;-
I'm only the messenger LOL !
The black line shows the Dow bear market that started on September 3rd, 1929. After that drop, the Dow didn't make it back to its highs until 1954!!
The magenta line is the Nasdaq bear market that started on March 11th, 2000.
There are several immediate observations that jump right out on the above chart. The first is the startling similarity between the current Nasdaq bear market and the 1929 crash. A second observation is that the pace of this bear market has been flirting with the pace of the 1929 crash right from the beginning.
In fact, in the first year of the current crash, the pace was actually ahead of the pace of the 1929 market. But perhaps the scariest thing about this chart is just how much lower and how much longer a bear market can go.
The lines show the percentage drop from the highs made before each bear market started. The numbers on the left show the percentage of the market high. So the 40% line on the chart represents a 60% drop from the all time high.
The numbers across the bottom are the number of days that have passed since the market top. In the case of the Dow, we are showing approximately 2600 trading days (over 10 years) from the high in September, 1929.
As you can see, the Nasdaq bear market is following very closely in the footprints of the 1929 Crash.
Here is a quick comparison of the current Nasdaq bear market and the 1929 crash:
Percent decline Length (in days)
929 Dow -89.2%
714 days
2000-02 (so far) -77.8%
648 days
The length is measured from the high to the low. The percent decline is on a closing basis, from the high to the low. The length is in market days...there are approximately 250 market days per year.
If the current bear lasts as long as the 1929 bear market, we will not get a bottom until 2003. so they say !
The black line shows the Nikkei bear market that started on January 1st, 1990. That bear market is still grinding on. In fact, the Nikkei just made new lows more than 11 years after this bear market started.
The magenta line is the Nasdaq bear market that started on March 11th, 2000.
As you can see, the current Nasdaq bear market is a newbie compared to the Nikkei bear. It took 2,669 trading days for the Nikkei to fall from the highs on 12/29/89 to the lows on 3/5/01. In that time, the Nikkei has fallen 68.3%.
Clearly, the Nikkei bear market has been devastating, especially in its length. Our current Nasdaq bear market is starting to approach the Nikkei in terms of percentage decline...but let's just hope that we aren't still looking for a bottom for the current bear market in 2012!
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