300 Point Rallies: Final Point

Friday, August 15, 2008 | 11:38 AM

One final note on our prior discussions of 300 point rallies since 2000:

The first firm to make note of this (as far as I can tell) was a study by Lowry’s Reports. They discovered that during the 2000-2003 bear market, there were sixteen three hundred-point up days in the DJIA. Despite these big surges, the market continued to make lower lows.  That began in March 2000, and ended 3 years later in March 2003.

By contrast, this volatility was not present during the bull run from March 2003- October 2007. There were no three hundred-point up days during that entire period

Bear market rallies tend to be much sharper than bull market advances.  Volatility is higher, shorts have profits to protect, and bottom calls are rampant.

There you have it: The past bull market: None; the past bear market: 16.

>

Previously:
300 Point Dow Gains? During Bear Markets ONLY
http://bigpicture.typepad.com/comments/2008/08/300-point-dow-g.html

300 Point Rally follow up
http://bigpicture.typepad.com/comments/2008/08/300-point-rally.html

Friday, August 15, 2008 | 11:38 AM | Permalink | Comments (22) | TrackBack (0)
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Comments

Semi-off topic rant....I agree with the general conclusion above, but I wish whenever market studies are done they...

1. Use the SPX as it's the institutional benchmark/most liquid/traded futures contract/etc.

2. Use percentage moves and not points.

Naturally if the premise is broad enough points 1 and 2 don't matter....but just want to bring some rigor/apples to apples comparisons into market analysis.

Cheers.

Posted by: i'm just saying | Aug 15, 2008 11:53:16 AM

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