Standard & Poor’s 500 was created in 1957 and since then it has gone through 9 bear markets (Defined as a GREATER THAN 20% decline on a CLOSING basis). 2022 will make 10 but at this point we do not know whether or not we have a bottom in place until we can break above the all time high of 4818.62
As you can see from the below charts, with the exception of Oct 1987; all the bottoms have large & steady “thrusts” IMMEDIATELY after the lows were made that held the following re-tracements IMMEDIATELY:
.382 – 67% (6 out 9 bottoms- 2009, 2002, 1982, 1974,1966, 1962)
.50 – 11% (1 out 9 bottoms-2020)
.618 – 11% (1 out 9 bottoms- 1970)
< .618 – 11% (1 out 9 bottoms-1987)
Our current bottom could NOT hold the .618 immediately after the low was made therefore it falls into the category of the 1987 exception/rare case. The strongest cases show a thrust and then hold of a .382 re-tracement.
I’m using a very basic bar chart with black bars to cut down the noise of everything, inserting a Fib Re-tracement, drawing the immediate thrust and adding the number of trading days it took to get above the last lower high.
June 1962 (Approx decline: 27%)
Oct 1966 (Approx decline: 22%)
May 1970 (Approx decline: 33%)
Oct 1974 (Approx decline: 48%)
Aug 1982 (Approx decline: 27%)
Oct 1987 (Approx decline: 33%)
Oct 2002 (Approx decline: 47%)
March 2009 (Approx decline: 56%)
March 2020 (Approx decline: 32%)
I hope you enjoyed this post…at a minimum it gives me one post that goes back in time to look at the of all 9 SPX bear market bottoms to analyze the look and feel of a bear market bottom since they happen so infrequently!