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The bear within a bear

Forget March coming in like a lion; it’s more like a bear.

The S&P 500 ended 2008 at 903; as of today’s close, it’s 696. That represents a 22.9% decline in two months. Since one widely accepted definition of a bear market is a 20% drop from the high, that easily qualifies 2009 as having its own little bear market, not counting the damage done last year.

When it comes to seeing the light at the end of the tunnel, let’s hope 2009’s bear market gets wrapped into the larger bear that officially began Oct. 10, 2007. The 15 bear markets since 1940 have lasted an average of a year after they began (based on research from Bespoke Investment Group). Needless to say, the larger bear market is already past that now and well on its way to the kind of longevity seen in 1973-74, when the bear prowled for 630 days. It’s been 464 days since the 2007 bear started. That puts us at roughly 3/4 of the way to matching ’73-74’s time frame.

An average recovery from the 2009 bear-within-a-bear would put it at roughly this time next year. Then again, who said these times were average?

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