Loading ...Bear Market phases revisited:
As a reminder, bear markets evolve in distinct phases as depicted below. The first down leg is generally a decline of about -11% in 50 days (median results). This is followed by a re-test rally of 8% over 29 days. After that re-test fails, the dreaded major down leg phase ensues, with a median decline of -29% over 105 days. We believe we are now entering the major down leg phase right here right now. While this recent re-test rally of 16% has been well above average, it fits proportionally with the greater than average first down leg of -20%, and the time duration for both phases has been consistent with norms. This suggests that the major down-leg ahead should be at least as painful as the median decline of -29% during the next phase. Buckle up.