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This Bear Fiercer Than the Last


Previous such markets had more tradable rallies, longer time horizons.

Sometimes, it helps to stop and think where you are going - and yes, it 's true for trading as well as for life.

In that spirit, I wanted to bring to attention the magnitude of bear-market rallies in the last bear market, and compare them to this one.

As the chart shows, there were 6 countertrend rallies in 2000-2002.

Click to enlarge

There were 4 almost 20% rallies, and they all lasted longer than a few days.

And this bear market has seen 4 bear market rallies thus far; 2 of them were quite weak, and the last 2 (starting in October and November 2008) were strong. But if you weren't in the market when they started, you missed most of the action - since the bulk of the move happened in a very short time.

Click to enlarge

Even the 1929-1932 timeframe had more tradable bear-market rallies than now.

Click to enlarge

And to top it all, the most recent decline has been crammed into about 16 months, as opposed to the over 2-year time horizon the last time around.

So, in more ways than one, this bear market has been more brutal than, though very different from, the previous bear. If you think making money on the long side has been rather tough during this brutal bear - well, now you know why.
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