![]() ![]() ![]() The global shutdown was more of a self-inflicted policy based recession that was unprecedented as economics literally shutdown. The sheer magnitude of pace of the sell-off qualified it as a bear market, but a V-shaped recovery started to occur months after the bottom was put in. ![]() The S&P 500 fell 27% from the highs and concluded hitting lows around March 24, 2021. The most recent bear market started on February 19, 2020, during the COVID-19 global pandemic. Bear market series#The Fed then implemented a series of quantitative easing (QE) programs followed by central banks around the world to buy bonds and assets to help credit and equity markets to recover. Federal Reserve (Fed) had to implement the Troubled Asset Relief Program (TARP) to finally get the markets to calm down and recover. The 2007 financial meltdown lasted nearly two-years as the U.S. Some bear markets can last just a few months to a few quarters depending on the underlying cause. The average bear market tends to last less than two years. On average, the time between a peak and the onset of recession is seven to eight months.īear markets tend to occur around every 56 months on average. Since 1948, eight of 11 bear markets have been followed by recessions. Since a recession is based on economic reports that are often a month late, bear markets often tend to signal recessions months ahead of time. A recession is considered with two or more sequential quarters of falling gross domestic product (GDP). Just as a bull market tends to occur during economic expansion, bear markets tend to usher in recessions. Economic Implicationsīear markets tend to precede an economic downturn as recession fears rise and unemployment tends to rise. This causes investor sentiment to turn negative causing stock prices to continue cascading lower and lower. Criteriaīear markets occur with indexes fall 20% or more off highs for at least 60-days. Smaller time frames don’t feel any different in a bear market than a bull market, except the follow through tends to be different. However, the intraday action can feel different for an active trader. That is the technical definition of a bear market. indexes continue to sell-off (-20%) or more off it’s highs for 60-days or more. A bear market is a condition where the major U.S. The pattern of a lower high and lower low continue until the buyers walk away from frustration causing sellers to panic. This is very much how bear markets can happen drastically usually as stocks peak off highs and the dips get deeper and the upward moves get smaller. ![]() Additionally, bears like to sneak up on its prey and attack. What is a Bear Market?Ī bear market is symbolized in the form a bear that is clawing down, compared to a bull market symbolized by a bull striking up with its horns. You finally stop out as shares continue to grind much lower. Your stomach drops as the bid collapses lower and you go from happiness to panic as you contemplate taking a stop-loss. The support level you have been stalking for days has evaporated as more panic selling ensues. However, the bids keep sinking lower followed by more size on the ask. The market sells off, you are thrilled to fill your orders at the bid ready for the bounce. ![]()
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