Historical Bull and Bear Markets for the Dow: 1900-Present

In the past, we have just focused on bull and bear markets for the Dow since World War II because the US was still essentially an emerging market prior to then.  However, since the current market is unlike anything seen since the early 1900s, we've taken the date range back further. 

Since the end of World War II, there have only been 13 bear markets and 12 bull markets using the standard 20% rally and decline measure.  The average bull or bear since then has lasted 911 calendar days.  From 1900 to 1946, there were 20 bulls and 20 bears.  From 1929 to 1934 alone, there were 9 bears and 8 bulls, and the average bull or bear lasted just 105 calendar days. 

Since volatility is currently at levels not seen since the 1930s, are we in store for a market where 20% rallies and declines become commonplace again?  It's definitely a possibility.  With a gain of 11% yesterday, many are now even talking about a new bull market occurring in a matter of days.  To hit the 20% gain threshold, the Dow needs to get back to 10,141.43, which is still a long ways away from the Dow's current level of 9,300.

click to enlarge

Comments

[bullbear08:]

what is the source of the data?

2008 Oct 14 08:00 PM

[debtacid:]

It’s kind of tragic to watch investment advisors go through the motions as though nothing has changed since last October. I suppose, at some point, they will figure out their world is gone and move on.

2008 Oct 14 08:27 PM

[Saint Peter II:]

American cycles of bear and bull markets are becoming ever more the micro, in that the global economic order is becoming more and more important. after wwII the us economic dominance was so masssive that our economy was the macro, but as that dominance declines and we adjust to the global order the cycles of bear and bull markets seen in the past are effected because they exist in a new environment. In the main we are not experiencing a cycle driven by a single factor, it's not a recession nor a depression it's a adjustment to the new global economic order and concurrently a downsizing of the American life style. This is greatly aggravated by the pyramid scheme that masqueraded as a banking system. sorry i can't up load images here, but I was in DC a few days ago and saw Uncle Sam doing a new kind of investing at The Spank of America. visit www.saintppeterii.com

2008 Oct 14 10:14 PM

[johnthebear:]

It would be nice to see detailed charts during the 1925 to 1940 period, overlaid with the Dow and (Nasdaq adjusted for dates).

I suspect that the 2000-2003 bear will be short in comparison with this financial disaster since the basic financial system remained sound, world wide. Not so this time.

Now we have to recover with badly wounded banking system, looking over it's shoulders at regulators trying to make sure every loan is justified. Good thought, and necessary in view of the abuse in Congress and with powerful corruption caused by Acorn along with Feddie and Fannie.

Now, lenders are crippled with shortage of qualified employees to make loans, review appraisals and process the loans. Also, I cannot foresee a return to the securitization of mortgages any time soon, so lenders that make the loans will probably have to live with them for the duration. Maybe 10 years from now there may be something similar, but hopefully with strong regulation.

2008 Oct 14 11:12 PM

[John Lounsbury:]

Bullbear08 - - -
I am studying the same data. It is available from Yahoo finance and from the Dow Jones Company.

2008 Oct 15 11:06 AM

[Dividend Gr...:]

You could find the data on this website:

www.djindexes.com/mdsi...

2008 Oct 16 01:08 PM

[Glen Bradford:]

By your calculations, we will be in a bull market again when the Dow gets up to 9062.

20th November 2008 Dow
7552*1.2=9062

That's only a 6.3% increase! We got up to 8924. Almost a reversal.

Good news for me.

2008 Dec 23 04:59 PM