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Comparing This To The 1930’s Bear Market Rallies at Trader’s Narrative

Some are comparing the current bear market to the brutal one we saw in the 1930’s, so here’s a chart comparing this rally (so far) to the bear market rallies back then:

bear market rallies in 1930s compared to spring 2009
Source: Chart of the Day

To be honest, I don’t really like the Dow Jones Index so I’ve plotted the point at which the current rally reached its maximum as measured by the Standard & Poors 500 Index in green - a 37.4% increase from the spring lows (reached on May 8th 2009). Since then, the stock market has just slithered sideways anyway.

Any way you measure it, either by the Dow or the S&P 500, the present rally has been stronger than most of the bear market rallies in the 1930’s. The outlier is the November 1929 rally which lasted 155 days and took the Dow 48% higher.

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5 Responses to “Comparing This To The 1930’s Bear Market Rallies”  

  1. 1 PEJ

    Fantastic chart. Gloomy conclusions.

  2. 2 Douglas


    What about 1938 - or later 30’s?

  3. 3 skater

    Not sure where you are getting your Nov 1929 datapoint?
    155 days from the low?

  4. 4 Tom

    Dear Babak:

    I am having trouble with the NYSE Member Short sale numbers. They used to be readily available and understandable in Barron’s but they now have to be dug out of the NYSE website and I am not sure what is different but they do not speak to me now and they are confusing. Am I reading things wrong or is it that the specialist is not what the used to be?. Should we be looking at other things like the S&P Futures Commitment of Traders Report or what to see if the pros are really short? Please let me know when you have the time your view in regard to this professional shorting question and if you cannot address it on your website then I would greatly appreciate a response to my email. Thanks a bunch and keep up the great work.

  5. 5 Babak

    Tom, this is part and parcel of all indicators really. And the reason why you should always take any one indicator with a grain of salt. For example, the options market has been acting bonkers during this whole bear market. I prefer to look at the weight of the indicators rather than any one specific one because they do get corrupted or stop working. The CoT report is a good example. It is not what it used to be. Maybe because the players have moved on to OTC derivatives to hedge or… who knows!

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