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Some long bear market time periods from the past include:
1835 to 1842 = 7 years
1890 to 1896 = 6 years
1909 to 1914 = 5 years
1937 to 1942 = 5 years
Sometime between now; or the end of this year; based on what history
teaches us; is that we should have a rise into the year 2003. This
according
to Ned Davis research. He points out that every four years, from the low in
the 2nd year of every Administration since 1914, the market has staged an
impressive rally to its high the following year, with even the stodgy old
Dow
averaging a 50% gain in the rally. Going back to 1934; the shortest
percentage gain rally was from 10/09/1946 to 02/08/1947; during which time
the S&P gained only 14.7%. This happened to also be the shortest time span;
which lasted roughly five (5) months. The largest gain was from 01/11/1954
to 11/14/1955; during which time the S&P gained 87.1%. The time span was
roughly twenty two (22) months. The average time period encompassing the
seventeen rallies since 1934 was about sixteen (16) months.
Interestingly; the four time periods encompassing each of the long term bear
markets; cited above; also saw a major rise which lasted many months and
retraced 50% or more of the prior bear market decline.
Bottom line here is that according to history; we should see a rally lasting
into
2003; then another painful leg down. Just where and when the final lows
will
be recorded is another discussion.
Having said that; it was the late Edson Gould who observed that the bear
markets which followed the great bull markets lasted rougly at least
one-third as long in time. Assuming that the last bull market had its
beginnings in 1982 and ended in 2000; we can easily calculate that the final
lows; time wise; will not be recorded until sometime in 2006. The future of
course isn't written in stone but this is simply the evidence recorded by
the history of bear markets.
chas
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