Bear markets don’t historically end after only four weeks. Dropping dramatically then advancing back to new all-time highs for a “V” shaped recovery.
That is not to say that we should rule that scenario out. It is just that I believe that is a very low odds outcome based on what I am seeing in market technicals and how bear markets of the past have played out.
Below is a chart of the S&P 500 that shows the current bear market. We are less than 7 weeks into this bear market, which by historic standards, is the early innings of what could be a long, drawn-out process.
The last bear market occurred in 2007 – 2009. Below is a chart of the S&P 500 over that period. As you will notice, there were numerous bounces that totaled between 7% – 24% over the entire correction. Historically, bear markets wear you out and go out with a whimper, not a bang.
I plan on delving into this topic in detail in our upcoming webinar. Please feel free to register below. I would love to have you join us for what I hope is an informative, forward-looking analysis of financial markets.
Market Update Webinar
Wednesday – April 8, 2020, at 4:00 CST
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If anyone has questions or concerns, please feel free to contact me. Take care and be safe.
Craig Thompson, ChFC
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