Mark J Lundeen, a private economic researcher has developed what he called 'Bear's Eye View' (BEV) Chart to track the depth and form of the bear market. Since the Great Depression Dow Jones Industrial Averages (Dow) has fallen by more than 40% in only 5 occasions as shown below. The current bear market until the low of 6547 on 9 March 2009 is the second deepest bear market. Whether 6547 is the low remains a question mark.
Mark J Lundeen uses market top as the 0% reference point and plots the downtrend chart based on percentage drop. The charts for the 1932 (red line) and 2007 (blue line) bear markets are as shown below.
The 1932 (red line) and 2007 (blue line) charts did show some similarity at certain stage of the downtrend. The current rebound of the 2007 bear at -50% level, whether it is only a technical rebound or it is the starting of a new bull phase, the question has no answer at this moment. How high the current rebound can go? Carl Swenlin, a self-taught technical analyst, based on the following chart for S&P 500, expecting resistance at 850 level. S&P 500 closed at 842 on Friday (3 March). He expects the index to break 850 after a small pull back and moves up to 1000 near the upper most trend line.
Similarly for Dow, the immediate resistance is 8,250. Dow closed last Friday at 8,017. In my previous post I have put forward 2 possibilities for Dow, i.e. (i) a diagonal wave 5 formation and (ii) Major Wave B rebound has started. For Carl Swenlin, as he is expecting S&P to break through 850 and to reach 1000, indirectly he has rule out the possibility of a diagonal wave 5 formation. Within the next one week, after a small pull back from 850 if S&P breaking away from 850 and moves higher, it is Major Wave B. But, if S&P started to turn downward, most likely it is diagonal wave 5 formation.
Mark J Lundeen uses market top as the 0% reference point and plots the downtrend chart based on percentage drop. The charts for the 1932 (red line) and 2007 (blue line) bear markets are as shown below.
The 1932 (red line) and 2007 (blue line) charts did show some similarity at certain stage of the downtrend. The current rebound of the 2007 bear at -50% level, whether it is only a technical rebound or it is the starting of a new bull phase, the question has no answer at this moment. How high the current rebound can go? Carl Swenlin, a self-taught technical analyst, based on the following chart for S&P 500, expecting resistance at 850 level. S&P 500 closed at 842 on Friday (3 March). He expects the index to break 850 after a small pull back and moves up to 1000 near the upper most trend line.
Similarly for Dow, the immediate resistance is 8,250. Dow closed last Friday at 8,017. In my previous post I have put forward 2 possibilities for Dow, i.e. (i) a diagonal wave 5 formation and (ii) Major Wave B rebound has started. For Carl Swenlin, as he is expecting S&P to break through 850 and to reach 1000, indirectly he has rule out the possibility of a diagonal wave 5 formation. Within the next one week, after a small pull back from 850 if S&P breaking away from 850 and moves higher, it is Major Wave B. But, if S&P started to turn downward, most likely it is diagonal wave 5 formation.
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