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Major Bear Market Bottom 10/29/2002? (9/2/2002)

This article was first published with a similar content in November 2001, today I am presenting a revised and updated version. The basic hypothesis remains the same: the first leg of the bear-market that started in 2000 can end around 10/29/2002 at the earliest (but the downtrend can as well continue until mid-2003). This article demonstrates the interesting opportunities offered by my holistic approach.

Step 1: which year?

For these reasons I believe we will see a long-termLong-term means a time horizon of years. bottom either in 2002 or in 2003. Let's check now which date is most likely in 2002.

Step 2: which months?

  • Lows of major bear markets are often in the second half of the year
    historical examples (Dow Jones):
    bear market 1929-32 bottomed on July 8, 1932
    bear market 1973-74 bottomed on December 9, 1974
    bear market 1981-82 bottomed on August 10, 1982
  • Duration of major bear markets:
    I think that the most appropriate (magnitude, time) historical examples for the current bear market are the US from 1929-1932 and Japan from 1990-1992.
    Nikkei 225 1/1990-8/1992: duration 31 months
    Dow Jones Industrials 9/1929-7/1932: duration 34 months
    The high was in March 2000, so when we add 31-34 months we arrive at the October 2002 - January 2003 time frame.
  • 56-year panic cycleA cycle is a recurring event in the markets. as suggested by David McMinn:
    a financial panic is likely in fall 2002 (sequence 18)
  • Seasonal cycleA cycle is a recurring event in the markets.s:
    yearly low quite often in October-November
  • Market geometry:
    The major bottoms of this century were separated by about 7360 and. 9010 days which argues for the second half of October 2002.
    10/29/2002 is 7383 days from 8/12/1982 (start of the bull market of the 80ies and 90ies) and 9008 days from 3/1/1978 (4-year cycleA cycle is a recurring event in the markets. low).

Good reasons to narrow the time frame to October-November 2002.

Step 3: which days?

For these reasons I do expect a major bear market low for the week from Monday 10/28 - Friday, 1/11/2002. My favorite is Tuesday, October 29, 2002 unless we see a real crash (losses 20-30% within days), in this case I project Friday, November 1, 2002 instead. A possible re-test is likely around 11/11/2002. This low, however, will be taken out by 2004 and probably already in 2003, i.e. it is not the end of the secularSecular means historic trends of 5-30years. bear market.