Thursday, May 7, 2009

Bear Market 1956-1957


Chart from Clusterstock.com

The above chart depicts a bear market during the Dwight Eisenhower presidency. The S&P 500 stock index fell from 49.68 in July 1956 to 38.98 at he end of 1957. In 1956 through 1957 for 7 months the market dropped 15% and then rallied up 26% for 3 months before plummeting 18% for 5 months. If you look at this bear market the basing phase took a couple months before the market rallied up 86% off the lows. A long basing period is good because it allows the market to work off the excesses from the previous expansion.

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