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Friday, April 12, 2024

The “Real” Mega-Bears

The "Real" Mega-Bears 

Courtesy of Doug Short 

Click to ViewIt’s time again for the weekend update of our "Real" Mega-Bears, an inflation-adjusted overlay of three secular bear markets. It aligns the current S&P 500 from the top of the Tech Bubble in March 2000, the Dow in of 1929, and the Nikkei 225 from its 1989 bubble high.

This chart is consistent with my preference for real (inflation-adjusted) analysis of long-term market behavior. The nominal all-time high in the index occurred in October 2007, but when we adjust for inflation, the "real" all-time high for the S&P 500 occurred in March 2000.

Here is a nominal version to help clarify the impact of inflation and deflation, which varied significantly across these three markets.

For those who prefer the overlay aligned with the 2007 S&P 500 peak, here is the nominal Mega-Bear Quartet charts and commentary.

Note: These charts are not intended as a forecast but rather as a way to study the today’s market in relation to historic market cycles.  

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