Stock Market Rally Comparisons

The folks at Chart of the Day (www.chartoftheday.com ) have posted at chart that compares what has taken place during previous stock market rallies following a “‘massive bear market” —  defined as a decline of greater than 50%. There  have been only three such bear markets since the Dow was established in 1896.  They took place in the  early 1930s, late 1930s until early 1940s, and after the financial cataclysm of 2008.  The chart also  adds the rally that followed the dot-com bust during which the Nasdaq declined 78%. The chart demonstrates that the current rally is similar to that of the Nasdaq rally that began in late 2002 as well as the Dow rally that began in 1942. After about ten months, the  prior rallies moved into a trading range/choppy phase that lasted for a year or more.

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