That’s worth pointing out because, after hitting all-time highs on the first trading day of 2022, the major U.S. stock market indexes have suffered an unusually large loss. The Dow Jones Industrial Average’s DJIA, -1.99% January-through-April delcine was the worst start to a calendar year since 1939, for example. The comparable loss for the Nasdaq Composite COMP, -4.29% was the worst start to any year in its history. .
These 32 bear markets are plotted in the chart below. Notice the lack of any correlation between the magnitude of the bear market’s first-four-month loss and the eventual length of the bear market. The chart also shows the r-squared for the trendline that best fits the data points, and it’s essentially zero — indicating that there is no statistically significant relationship between the two data series.
This is once again illustrated by the 1939-42 bear market. After losing 4.9% in its initial four months, the Dow over the remainder of that bear market lost an additional 37.3%. That’s nearly double the average bear-market loss from its four-month mark to its end.
MktwHulbert $DJIA 1921-1932 vs $DIA 2009-2022 Listen to financial MSM when the dead cats start falling and refer back to this 1929 chart. MSM is not your friend. $SPY $QQQ $IWM
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