Today's chart illustrates rallies that followed massive bear markets. For today's chart, a 'massive' bear market is defined as a decline of greater than -50%.
Since the Dow's inception in 1896, there have been only three bear markets whereby the Dow declined more than -50% (early 1930s, late 1930s until early 1940s, and during the very recent financial crisis).
Today's chart also adds the rally that followed the dot-com bust during which the Nasdaq declined -78%.
The current Dow rally has followed a somewhat middle of the road path and has most closely followed the post dot-com bust rally that began back in 2002.
If the current rally were to continue to follow the post-massive bear market rally pattern, the market would have to resume its rally in relatively short order.
Commentary & Analysis Courtesy of Chart of The Day
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