November 20, 2008 7:43PM
Some New, Bad Milestones for the Market
By Ray Hennessey
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Courtesy of the folks at Dow Jones Indexes, here are some stats after today's sharp drop:
- The current month is actually worse than October, which was pretty darned bad.
- If the DJIA were to end at this level now, it would mark the end of the worst two-month period since April and May of 1932 (30.4 percent now vs. 38.95 percent then).
- This is the biggest two-day drop since the two days ended Oct. 20, 1987, or the last big crash.
- The DJIA is now 47 percent from its record close, which makes it a worse bear market than the 45 percent drop in 1973-74 and the worst since the 1937-1938 bear market.
- If the Dow falls further so that it drops 49 percent, it will be the worst since the 1929-1932 Great Depression bear market (though the Dow fell a whopping 89 percent from its high in that market).
- If the market were to end the year at this level, it will be the second-worst year for the Dow Jones Industrials in history, behind the 52.67 percent drop in 1931. (That is not that far to go, btw.)
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The temporatry bottom is very close, probably on Thursday. We should see a rally for technical and emotional reasons.
However, after the Bear Rally, all the stock markets will stair step down to 30% to 50% from that high within 12 months.
Everyone is “looking” for the bottom in the stock market, I suggest they start “listening”, the new milestone may well be a “splat.”
Michael,
Let us know how that “hogwild” thing works out for ya!
Best regards,
The Herd
I expect the stock market to drop another 1,000 points at a minimum due to the hysteria in the news. The “herd” will follow the news until a bunch of folks like me will see the laughable bargains for stocks and go hogwild buying for the long term instead of all of these wantabe day traders. IF GM goes down then expect the market to drop to about 5500 to 6000. Of course that is my humble opine…
-Michael
I’m surprised there are no comments to these stats. Perhaps the public is lying in this economic mess, pulling the covers up over their heads and whimpering ‘enough!’.