The bear is back - but how deep?

T

traderdragon2

Since were officially in a bear market now, id like to hear what peoples guesses are for a bottom in terms of percentage and length.

The average bear market causes a loss of 34% from peak to trough, and considering the above average shit storm thats been brewing in the credit and housing markets, I think the probability that we at least touch the 34% average is quite high.

Anyone for 40%? 45, 50, 55+%?

Post your best guesses and total length of this bear in months, with your reasoning.

Ill guess 40% and 1.5 years, and I think thats optimistic.
 
Quote from traderdragon2:

No macro traders here on ET?
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I am an Elliotician macro trader and I can say that considering the markets are only now looking to correct the first bear wave, and since a completed second and third wave are required to channel forecast a bottom or a five wave correction, all that can be forecasted are bounces.

The question is not only rhetorical, but moot.
 
S&P 1000 by October. That would be about 37% from the highs, and a 1 year bear market. Since stocks were not in a bubble at the top, there's no reason to expect a rerun of 2000-2002, 1973-74, or 1929-32. That leaves a nasty but normal bear market as the "worst case" scenario IMO.
 
Quote from Cutten:

S&P 1000 by October. That would be about 37% from the highs, and a 1 year bear market. Since stocks were not in a bubble at the top, there's no reason to expect a rerun of 2000-2002, 1973-74, or 1929-32. That leaves a nasty but normal bear market as the "worst case" scenario IMO.
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983.25 by Christmas. By October we'll be trading at current levels at the beginning of the second wave bounce off of the second impulse.

Blips, scalps, half-swings is what's been refered to as bear markets up to the present. Ain't nothing right with the world, man or the markets, and she's about to let a cry out.
 
Quote from Cutten:

S&P 1000 by October. That would be about 37% from the highs, and a 1 year bear market. Since stocks were not in a bubble at the top, there's no reason to expect a rerun of 2000-2002, 1973-74, or 1929-32. That leaves a nasty but normal bear market as the "worst case" scenario IMO.
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37% would take us back to mid 2003 near the bottom of the internet crash. Damn!

But your logic seems sound, is certainly in line with bear market history, and you are one of the guys here who actually knows what he is talking about. Sounds reasonable to me.

Cutten.... I have a hypothesis though.
I have seen a trend where more and more people are discovering the best thing they can do is simply invest in a big index instead of buying mutual funds and individual stocks to try and beat the market. The truth is getting out there. 90% of fund managers fail to beat the S&P every year. The numbers get far worse over a 10 year period. So we have more and more people who are automatically investing into the S&P via 401Ks and automated investment plans. This creates an under current in one direction, and I believe may be reducing volatility over all. So I wonder if the 34% bear market drop average will actually shrink each year as time goes by.

What do you think?
 
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