With stocks surging this week and now more than 20% higher from their mid-March lows, many wonder whether the great coronavirus bear market of 2020 is now history or whether the stock market will hit a new low later this year. Mark Hulbert, writing for MarketWatch, looked at past bear markets for the answer and is convinced the answer is “lower low later”. The Dow fell by more than 37% from February’s high to its March low; market data shows such declines have occurred 11 other times in history. On average across those 11, as shown on the chart below, the final bear market low came 137 days after first registering such a loss. Adding that average number of days to the day of the March low projects another potentially lower low on Aug. 7. (Chart from MarketWatch.com)
Lower Low Later
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April 13, 2020