Bear Market?

[Nick Radge]

What is your definition of a bear market?

 

[Sean K]

Would have to be a sustained period under the long term average wouldn't it 30% would be a crash, 10% is a correction, so maybe something in the middle....

From the glossary on Stockcharts.com:

Bear Market A long period of time when prices in the market are generally declining. It is often measured by a percentage decline of more than 20%.

 

[wayneL]

Nick,

I would want to see a downtrend (as opposed to a correction/retracement within the up trend) by some definition... EW, Dow Theory or suck like.

But an out and out crash would be convincing without resorting to the above.

 

[CanOz]

Would have to be a sustained period under the long term average wouldn't it 30% would be a crash, 10% is a correction, so maybe something in the middle....

From the glossary on Stockcharts.com:

Bear Market A long period of time when prices in the market are generally declining. It is often measured by a percentage decline of more than 20%.

I did a rough calculation of the market from the open on the 15th of May until the close on the 17th of September and got a 21% decline over 19 weeks.

That to me, was a bear market. 20%

 

[Sean K]

I did a rough calculation of the market from the open on the 15th of May until the close on the 17th of September and got a 21% decline over 19 weeks.

That to me, was a bear market. 20%

I think it needs to be a bit longer than that. Like over a year, maybe 2. I think what we had this year was a sustained correction.

All semantics really. What is a 'long' period of time. What is 'sustained'? ??

We are still in a bullmarket stated in 2003 IMO.

 

[wayneL]

I did a rough calculation of the market from the open on the 15th of May until the close on the 17th of September and got a 21% decline over 19 weeks.

That to me, was a bear market. 20%

Not to disagree at all, but just a different perspective: To me that wasn't a bear, just a correction. One more lower high and subsequent new low and I would have packed away my faux bull horns for long term storage.

But alas... no.

 

[nizar]

We are still in a bullmarket stated in 2003 IMO.

I reckon thats a good effort considering BHP has broke the underlying treadline since 2003.

 

[money tree]

A bear market is the absence of a bull market.

A bull market is a series of new all time highs.

Therefore, both the DOW and XJO are in bull markets.

bears are in denial

 

[Bronte]

What is yoru definition of a bear market?

My definition of a bear market is a declining market.
When you can see Lower Highs and Lower Lows
on the Minor as well as the Major Swing Charts

 

[mit]

I put >30%. A bear market can take out around 60% of the previous bull run. As the market has practically doubled in this bull run that makes 30% drop. It is true that if we broke below the last major low before the peak we would have technically been in a bear market. The market could have recovered from there but I think if this level had broken there would have been a lot of very fast selling and the market would have gone down.

Michael

 

[mildew79]

my definition is a sustained downtrend over a period greater than three months (. how can any of you guys put a percentage on it without stating a time period?? if it goes down 50 percent in two years thats not really a crash is it?? its also relative to fundementals. eg the recent six months of downward / sideways movement i would consider a correction, not a bear. this is simply because fundementals of companies were looking increasingly on the upside. everyone new the market was off again, just not sure how long before the advance began. a bear would be a down to side trend without this fundemental backing. hence future outlook would be negative, and confirmed via sustained price movement downwards.

 

[Kauri]

Dropping back through the 4100-4300 area.

 

[money tree]

this is interesting.

many different replies, some stating their "definition" is highly discretionary.

A definition must be simple and precise, not open to interpretation or discretion. Its black or white. You should be able to tell with the smallest analysis time and the least amount of info.

Most of these answers are only good in hindsight. What good are they? "well the market fell 20% last year, so Im gonna get in my time capsule & go back & avoid long positions"

Its laughable that some of the traders here are convinced we are in a bear market. I suppose when the DOW hits 20,000 and XJO hits 6000 that will still be the case?

wake up n smell the inflation!

 

[wayneL]

this is interesting.

many different replies, some stating their "definition" is highly discretionary.

A definition must be simple and precise, not open to interpretation or discretion. Its black or white. You should be able to tell with the smallest analysis time and the least amount of info.

Most of these answers are only good in hindsight. What good are they? "well the market fell 20% last year, so Im gonna get in my time capsule & go back & avoid long positions"

Its laughable that some of the traders here are convinced we are in a bear market. I suppose when the DOW hits 20,000 and XJO hits 6000 that will still be the case?

wake up n smell the inflation!

Speaking of inflation, the Dow, adusted for inflation still has not made a new high. Some like to compare to POG (I don't), it's well down by that measure.

Anyway, the Dow is only 30 stocks, and the method of calculation is odd. Not many Dow stocks are hitting highs... a couple only from memory.

The more broad based US indicies, the Nasdaq and SP500, have not hit new highs yet.

The ASX has become a proxy index for industrial metals and energy.

I wouldn't argue that we're in a bear, we're in a Grade A, USDA inspected bull IMO. But there are other views, depending on time frame and whatnot.

I'm still a bear, partly because of the *hidden inflation you mention, but this economy is in faeryland. Who knows how far it could run on the cash (credit) being thrown from bank windows at the wage slaves to prop this whole house of cards.

 

[nizar]

Great cartoon Wayne, i luvvit..

 

[CanOz]

Nick, what do you consider a bear market?

 

[Sean K]

What is your definition of a bear market?

Just curious why you have brought this thread up Nick. Are you trying to get our minds set for the big bear?

 

[mit]

this is interesting.

many different replies, some stating their "definition" is highly discretionary.

A definition must be simple and precise, not open to interpretation or discretion. Its black or white. You should be able to tell with the smallest analysis time and the least amount of info.

Most of these answers are only good in hindsight. What good are they? "well the market fell 20% last year, so Im gonna get in my time capsule & go back & avoid long positions"

Its laughable that some of the traders here are convinced we are in a bear market. I suppose when the DOW hits 20,000 and XJO hits 6000 that will still be the case?

wake up n smell the inflation!

There is a precise definition (see the DOW theory) but Nick's question is around percentages not a precise definition. And you are right by the definition we have been in a correction not a Bear market, however a technically a Bear market can last only a few months but this is rare. See one of the 'Trader Vic' books he went back an analyzed a couple of hundred years of the Dow averages and classified them into Bulls and Bears and gather a lot of good information on average percentage moves and times. The best information coming from the books was around using it as a tool for the rest of your analysis. That is in a young bull market head and shoulder patterns on individual shares rarely work while in a older bull market (at three years ours is a more mature market) it is more likely to happen and Visa Versa for a bullish pattern like a double bottom.


One thing that is relevant at the moment is that usually the end is signalled by the inability to make a new high. In some cases the market manages to make a new high then falls very rapidly.

MIT

 

[Nick Radge]

No not at all am I putting the scenario into any one's head. I recently read an artcicle on bull/bear markets in the US since 1900. They stated bear markets lasting less than 10% and less then a few months. Was just wondering if there was some "firm" definition was all.

 

[Kauri]

When Share forums are swamped by newcomers all claiming how easy it is to make money intra-day trading, invariably call the trade after it has bolted, exit at the top and immediately re-enter another trade that has bolted and then claim to be trading in multiples of $100,000, I find that my Tsunami early warning alarms start ringing. :bowser: