The fate of a bear market rally

 The fate of a bear market rally [1]
for 5 months, global stock market rally to the New York, London, Frankfurt, Tokyo and other places of investors confidence in economic recovery and hope. The moment, the stock market again at a crossroads Almost every trader on the stock market is full of anxiety the next step in the direction, up or return to the downward trend continue to rise? someone from the technical analysis of the market itself to conclude that someone from the macroeconomic and micro-enterprises draw their own situation to improve conclusions. By contrast, we hope to determine from a comparison of historical stock market trends Contracts. preliminary conclusion is: started in March 2009 of the global stock market but a major bear market rally after .1929 Dow Jones index in 2000 after the Nasdaq peak in 1990, after the Nikkei 225 index have occurred in similar large-scale bear market rally. through the history and reality of the market for large-scale analysis, we might get some Inspiration different.
bear market rally will be four regular
after the Dow Jones index in 1929, after the 2000 Nasdaq peak in 1990, after the Nikkei 225 index to do comparison, see Figure 1 Figure 2. We found that several large-scale history of this bear market, although the times, in different market conditions and monetary system, bull and bear down the formation of the reasons behind the different opinions, but the relative ups and downs before and after the peak amplitude and time distribution and other aspects the basic law of the following four aspects:
Figure 1 The Dow Jones index (1921-1950) and the Nikkei 225 Index (1981-2007) Figure 2 Comparison of
Dow Jones index (1921-1950) and that NASDAQ Nasdaq index (1993-2009) before the peak contrast
super bull market: the super-bear market a few times, all before the peak, more than a decade has experienced a long-term rise, especially in the years before the peak experienced exponential speed increases. For example: February 8, 1971: the first index for the Nasdaq 100 points, after ten years exceeded 200 points in 1981 In 1991 April 12: 500; March 10, 2000: create a record high of 5048.62 points. And from August 1921 to September 1929, the Dow rose by 468% .1989 before the end of the peak, the Nikkei 225 index has experienced a 17-year bull market, the overall rose 20.23 times.
astonishing bull market decline after the peak: 3 years after the peak decline in more than 50% or more. Japan's Nikkei 225 index from the highest point of the end of 1989 fell to 20,221.86 points 38,916 points took 9 months, and to August 18, 1992 fell to 14,309 points, the peak value of the stock index dropped more than 63%. and the Nasdaq 10 March 2000 peak of 5132 points, only two months after a 3042 point fall in the third years, in October 2002 fell to 1108 points, and down 78% compared to the peak. The Dow Jones Index from September 1, 1929 fell 386 points to 41 points in 1932, falling 86%.
bear market rebound height can reach 50% before the decline even higher: bear market rallies that often lasted for up to several months, the late rebound, analysts and traders generally considered bear market has ended. When the bear market rally ended decrease in panic, the transaction who have realized their participation in the mini-bull market is a rebound, 50% recovery of the previous fall, continued to decline until 1932, after the lowest point. while the Nasdaq index began in May 2000 point rally from 3042 to 4289 points, to recover a 60% decline.
the length of the duration of a bear market more than most people expected at that time, in the first 14 years after the peak hit a low again. For example, the Dow fell from a peak in 1929, after the hit low again until 1942 (just above the the lowest point in 32 years) before starting to enter the long-term upward trend. Nikkei after the peak in 1990, also hit the lowest point in 2003. At present, the Nasdaq index in the first 9 years after the peak, its trends and 1929, 9 years after the Dow Jones index is very similar to the second large rally.
Many traders believe that the economic crisis broke out in 1929, especially in the beginning of 1929, Dow Jones and S & P 500 falling trend is isolated, unique, not like before 1929, a similar situation, after which there is no similar situation. actually not. Through the comparison we found that in 1932, long after the last big bear market will still be a few basic rules in different markets an effect on. We also found, and several years before and after 1929 bear market similar to the four characteristics of the stock market, far more than the few cases, such as the S & P after 1835 years after the gold 500,1980.
The Dow Jones index has the possibility of new lows we
1994-2009 1921-1956 Dow Jones index and the Dow Jones index contrast between the found (Figure 3, Figure 4), 2007 years after the Big Bear City in character and similar to the three movements. and if this similarity continues, then the above three major bear market in more than a decade in the performance of the four rules out of the future will be able to provide some clues. < br> Figure 3, the Dow Jones index (1921-1956) and (1994-2009) Figure 4 Comparison of A
Dow Jones index (1921-1956) and (1994-2009) Comparison of B
in Figure 3 We put the Dow's peak in 2000 and the Dow Jones index's peak in 1929 to compare the time coordinate coincide; in Figure 4, we put the Dow's peak in 2007 and the Dow Jones index of time to peak in 1929 compare the coordinates coincide. two comparisons, we can find a peak in 2007 and 1929 peak and the peak in 1937 are similar. The reason behind may be that after 2000 the Dow Jones and S & P 500 After the peak, with greater currency Greenspan bubble slowed the arrival of a large bear, resulting in a greater peak in 2007. So the Dow and 1931 the situation was the same, or the same as 1939?
If it is 1931, then dropped the time from the point of view is not enough, the Dow Jones index of the first wave of large-scale decline after 2007 lasted only one and a half, rather than the aforementioned three major bear market bottom in the three years before, that is, say whether the Dow after the rally after this wave, again in the future more than a year of time to new lows? from a historical perspective, the Dow Jones index has the potential to new lows.
the other hand, fell from the rate is also far from reach point of view, the Dow's low in March 6688 points down from the highest point of 14,088 points by 52%, and the several large-scale bear market, compared to the initial three years are a far cry from the decline. Some predict that the next two years, Dow Jones will test the top of the period 1966-1982 is roughly 1,000 points. But even if the Dow Jones index to new lows, will meet again after a few years to recover at least half the decline of large rebound . Some predict that the real bear market rally to wait until 2012 or so, there will be many oscillations after a rebound in the 14-year low after the peak, the latest in 2020 to start a new round of long-term rise in stock will enter Under a long-term rising trend continued, with the long-term economic prosperity.
1939 if this wave will be similar to 1938-39 Dow Jones index on the rebound, rebound height will be highs and lows before of the golden section line, which is roughly 11,200 points in the vicinity. That is the current Dow Jones index still room for growth around 2000. In three years, which is equivalent to 1942, in 2012, undergoing a Qiangzai low, after the Dow will enter a long-term upward trend in the large.
China's stock market over the next few years is difficult to bear-market rally index peak
Figure 5 The Shanghai Composite Index and the Dow Jones index (1921-1942) A
Figure 6, the Shanghai Composite Index and the Dow Jones index (1921-1942) B
in Figure 5, we put the Shanghai index's peak in 2007 and the Dow Jones index of the peak in 1929 to compare the time coordinate coincides shows that the Shanghai index's ups and downs before and after 2007, even more dramatic steep, steep level of perhaps only 1980 gold prices can be compared. When we put the Shanghai index expanded horizontal time scale, and then get and Road Jones index to compare, that is, Figure 6. We see declines from the lowest point, the relative height of rebound of view, the aforementioned three major stock index and
highly similar to the characteristics of a bear market. Therefore, we conclude the following: < br> in the first half of the stock market rebound, three hundred, and in Shanghai and Shenzhen index cards in circulation have been more than 50%, 60% deep refers to the close, and the laws of the Shalao bear market rally is relatively the same height; the next few years can only be repeated approximation of the second peak is difficult to exceed this height.
the next few months or even years of support, according to 1929--42-year rule, is the lowest value and the second peak before the next golden section between the above card index cases in the 2300-2380 point.
within the next several years lows, including the possibility of the first 14 years after the peak appears low, does not necessarily lower than the peak after the first low. That is the future The index fell below 1664 points again are slim.
the next 10 years, thousands of similar point a few years before and after 2007, the ups and downs will be very rare, index points in 3400 and 2300 the area between the long-term fluctuations will be the future trend.
the long bear market will be more than expected in the coming first out
into long-term bear market is likely to rise in the stock market in Japan, the Nikkei 225 index from 2003 lows, you may have entered a long-term bull market uptrend; but in 2007 the global outbreak of the inevitable impact of the economic crisis of the Japanese stock market's upward trend, in 2008 the Nikkei fell below 7603 points in 2003 and 7000 point mark after an integer, and there is no deep down; We believe that In the next two years, the Nikkei will be formed if the effective breaking 14,600 is different from the other countries of a new upward trend in the stock market. borrow a commodity futures analyst's comments, said: Inf, feng shui reincarnation, Japan in 20 years While economic statistics are marking time, but the Japanese companies and people in the 20 years of practical work will eventually return the Nikkei's Nirvana.
represented by the Nasdaq stock will lead into the high-tech industry once again long-term bull market: Nasdaq will be a low point after the year 2013-2014, began leading the Dow Jones and S & P 500, into a long-term bull trend. fundamental reason may be that cell phones and mobile devices is still the explosive growth, half of the world will use the phone, which has been in the other half of the world's mobile phone users will have more features and services, mobile equipment and communication network will integrate the current communication navigation system, TV computer and even the safety of all function, and then rise to numerous industries and business models, once again ignite the world for investment in high-tech and knowledge-based economy enthusiasm.
length of time a bear market more than most market participants expect the future path for the stock market and the economy , it may have been long and depressed. We long speculated that perhaps the U.S. stock market will not be as long as 1929m42 years, and we do not like the stock market in 1990 after the Japanese stock market so long, but definitely better than Today, most people expected much longer. investors need to pay more attention to the time value of money. In addition to concern about stock prices, we emphasis the value as a true long-term investors should be concerned about the return on corporate dividends, earnings and financial condition.
We speculate that perhaps Zhu Graham cycle, Kuznets cycle, Kondratieff cycles of several different cycles of the resonance and superposition effect, coupled with market forces and popular sentiment itself is speculative factors, creating the index of the long cycle. In the long bear market, some companies will disappear once great, but there are always some companies will survive and thrive after the boom. When the bear market ended, once again the great bull market coming, accounting standards around us, monetary system and business theory, and so things can not now look like.
Theoretically, this long-term predictions of the future will certainly fail, because the prediction itself has changed the future. but we are sure history will always repeat itself, because human nature never change.
[1] This article was written in August 2009, partners Mr. Wang Yafeng independent capital investors. Economists generally do not go straight to predict stock market, the paper's main index is not intended to predict the rise and fall, the main intention of writing is to compare the stock market trend in the financial crisis. China's stock market since the financial crisis the bottom of the top 70% rebound (the highest on the Shanghai Composite Index rebounded to more than 3400 points) We had hoped to see the stock market by comparing the historical trend of the future. From the past six months the operation of the stock market situation, which has strong persuasive historical comparison.
can not map. reproduced in full in a forthcoming book of How far? mm currency crisis, the oil bubble, and climate change.