DJIA Historic Bear Markets

With the market on edge and earnings season upon us posts have been light recently.  In the following chart and table we look at bear markets in the Dow Jones Industrial Average since the end of World War II (bear market being defined as a 20% decline or more from peak to trough).  The chart below shows the duration of the decline (0 is the start and 10 is the end), and where the market was most oversold, where the worst day occurred, and where the worst 10-day A/D on the NYSE was.

At first glance it may appear as though the end of a bear market is usually characterized by a final dramatic sell-off, but in reality this is only the case about 50% of the time.  (The data was taken from a bulletin distributed by Birinyi Associates on 7/7/08 and 7/2/08 was the low close at the time.  6/6/08: -3.13% remains the worst day for the DJIA in the current bear cycle.)