The bear market started in January 2008 when the Nifty made its all time high. We have seen ten months of a down move, the bear is now 10 months old. Is this enough ?
With some regret, I have to say that the bear market is likely to last longer than we imagine. Here are many reasons for this contention.
First, History. The last two bear markets started in 1992 and 2000. The 1992 bear market bottomed out in 1993 while the 2000 bear market botomed out in 2001. After making the bear market lows, both markets spent a lot of time base building.
Second, Bases. The 1992 bear market saw almost all sectors participate in the 'harshad mehta' rally. The resulting bear market was prolonged bcause all sectors were hurt. The market took a long time to build bases before reaching out to new highs. The 2000 bear market was mainly a Tech crash. The so called 'old economy' stocks had not participated in the rally. They were quitely building strong bases even during the IT boom. After the market crash, the 'old economy' socks took up leadership quickly as they were already in the process of base building. The bear market lasted for three years with an unprecedented bull market starting in 2003.
Where are we now ? The 2003 - 2008 bull market was similar to the 1992 bull market where all sectors of the stock market participated. Now, there is no leadership left. All of the sectors must go through the base building process. This will take its own time.
What is the chart for the Nifty looking like ? It shows a straight line decline. Where is the base ? This market will take its own time to revive. Meanwhile, we do not know if the market has bottomed out. Thus, there is a lot of pain probably left. Take care.
S2 Analytics Pvt Ltd
Search This Blog
to happiness is not being rich; it's doing something ardous and creating something of value and then being able to reflect on the fruits of your labor.
Arthur Brooks, The Battle
► 2011 (200)
- ► November (9)
► October (28)
- Answers to comments oct31-11
- Process of Consolidation Likely
- Nifty Pattern Targets Reached
- Happy Diwali
- Stock Selection (based upon their historical volat...
- M&M Consolidation
- Niftnear ORB Trade
- A dip in an ongoing up trend
- TATA Motors Life Cycle
- Hindalco touches support
- Mystery of the missing trailing stop
- Nifty Live Oct 12-11
- Point and Figure Charts
- Aiming for a better trade
- Long term view of Nifty
- Zen stories for Traders
- Hero Motor Corp at its support level
- NR 7 in Nifty Weekly Chart
- trading with a gap open
- Silver Pushes against Resistance
- An unusual continuation pattern in the Nifty
- Sudden Rally
- Nifty at 4750
- There is a time to be old and a time to be bold
- Afternoon review
- Nifty - Long Term View
- Higher High - Higher Low pattern in CNX IT
- Bear market shows its strength
► September (53)
- The Bear Story
- Nifty in a well defined range
- Morning View Sept 29
- Nifty Options Trade
- Nifty on way to close higher for this F&O settleme...
- Learning Ideas
- Short term trend is up
- Something Better
- A tale of two trades
- Before the Open - Sept 26-11
- Reliance - something better
- Nifty - A long term view
- Adding value to your analysis
- ► 2010 (263)
- ► 2009 (293)
▼ 2008 (219)
▼ November (26)
- Weekend Reading, Nov 30.
- Rally, maybe
- This time it may be different
- Market will tell us when it is bottoming out
- Hard Work is the easiest way to success
- New Posts
- This Bear Market may last longer than we imagine
- Is there a rally ?
- Traders enjoy the process of trading
- Bear Market continues, Nifty, Sensex may go below ...
- Choppy Market with down bias
- What should Investors do now ?
- Nifty returns for a 'Test' of earlier lows
- The trend remains down
- A Matter of Trust
- Udayan in Amritsar
- Early Morning Review - Friday 14 Nov
- It is not about earnings downgrades
- Abrupt End to Uptrend
- Has the Bull Market Started ?
- The 2 PM Review
- So much volatility, Market resembles a Casino
- The Market Corrects its up trend
- Smart Rally, but careful as Nifty comes near resis...
- Quite times coming ?
- Surpirse Rate Cut may not add strength to markets
- ▼ November (26)