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Australian Share Market
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One of the tools in Brainy's Share Market Toolbox.
The
charts below show the various Australian bear
markets and corrections
from 1987.
Latest update:- 29 September 2011.
NOTE:
Latest news: Bear
Market
Twins?
Will it happen? See
details below.
Aussie
BULL Markets information is freely available in the public
area.
You are here: Share Market Toolbox
> Members
Area
Gateway >
Australian share market BEAR Markets
Related (public) links: Australian share market BULL Markets;
Related links (for Toolbox Members): Australian share market BULL Markets; Australian share market BEAR Markets;
Related (public) links: Australian share market BULL Markets;
Related links (for Toolbox Members): Australian share market BULL Markets; Australian share market BEAR Markets;
Brief
comment about
the charts below
the charts below
The charts and comments below are purely observations of the market. They are of a general nature, and for general education only.
There is no advice.
It is recommended that you do NOT make any investment decisions based on andy of the information here.
Click on any chart to see a larger view in a new window.| Robert would like to keep you informed of new
information as it becomes available, and as updates are made
here. So consider registering to receive updated
news and
information. If you are a Toolbox Member, you can see detailed comments about the charts below, in the Members Area of Brainy's Share Market Toolbox web site. |
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The charts shown here are of the
Australian All
Ordinaries index (XAO) which is an aggregation of the "top" 500
companies in the Australian market. (What does "top" mean?
See details about Aussie indexes.)
The charts below are produced using the Australian BullCharts charting software.
The charts below are produced using the Australian BullCharts charting software.
The table at right is a summary of the
bear markets (falls greater than 20%) and corrections (falls of between 10% and 20%).
The "Amt (%)" is the percentage fall from the recent high to the market low (based on weekly Closing prices, not on Highest Highs).
"Weeks to bottom" column. The shortest bear market listed was 21 weeks (nearly 6 months). Unless you count the Correction K which hit bottom after just 5 weeks, and then recovered only to retest the bottom at 50 weeks from the start.
"Time to recover to past high" (the last column) is the amount of time that elapsed before the market recovered to sustain a new High. NOTE the average value at the bottom of the table.
| Bear Markets and Corrections — 1987 to 2011
(updated 29 September 2011) |
||||||
| Start Date | From Point | Bear Market or Correction | Amt (%) | Weeks to bottom | Time to recover to past high | |
| Weeks | Years | |||||
| Sept 1987 | A | Bear market | -48 | 21 | 470 | 9.0 |
| Oct 1989 | E | Bear market | -30 | 65 | 194 | 3.7 |
| Nov 1991 | G | Correction | -19 | 53 | 80 | 1.5 |
| Jan 1994 | I | Bear market | -21 | 53 | 150 | 2.9 |
| Sept 1997 | K | Correction | -11 | 5 or 50 | 66 | 1.3 |
| June 2001 | O | Correction | -21 | 88 | 152 | 2.9 |
| Oct 2007 * | S2 | Bear market | -54 | 73 | 207+ | 4.0+ |
| Apr 2010 * | U | Correction | -15 | 11* | 76+ | 1.5+ |
| Apr 2011 * | V | Bear Market | -22 | TBA* | TBA | TBA |
| Average time to make new highs: | 3.4 years | |||||
| * — The two latest Bear
Markets and the
latest Correction have all not yet recovered to new highs. |
||||||
Note:
- Within the Bear Market "A" there was a smaller bear market labelled "C", another labelled Bear Market "E", and yet another labelled Bear Market "I".
- It could be argued that the Bear Market that started at "A" can be discounted because the bull market peak at "A" could be passed off as an aberration. If we ignore the peak at "A", then the Bear Markets labelled "E" and "I" don't seem so bad.
For more detail and comment about each of these bear market periods, see the Members Area of Brainy's ShMarket Toolbox.
Note:
- Bear Mkt "I" is already shown in the previous chart above.
- From the peak at point "K", the market fell to "L", then recovered to K2 before falling again to L2. The fall of only about 10% qualifies only as a "correction"; but it took place over a 9 month period.
- You can see at a glance that the market took about 14 months from point "K" to recover back up to this level. That is, the market went no where for 14 months.
- The market repeated the behaviour from point "K" to "M" in the period from point "O" to the low at "R" before moving higher. Except this time the market took about 34 months to recover to the same level as point "O" in April 2004.
See more details in the
Members Area of the
Share Market Toolbox.
- The bull market that started in 2003 (not shown on this chart) ended in late 2007 at point "S", from where the market fell more than 10% before recovering to a new high at "S2". (See Bull Market "R" on the Summary Chart above, or a more detailed version of this 4-year bull market in the Members' Area.)
- The bear market labelled "S2" in the table above commenced at point "S2" on the weekly chart at right. The dip between points S and S2 is not so apparent on a monthly chart.
- The market fell about 53% from S2 to point "T" (a Tower Bottom candle pattern) over 16 months, then rose 61% to point "U".
- Even though Bear Market "S2" might technically have finished, we are still waiting to see new highs. That is, we have not yet fully recovered from the effects of Bear "S2". The rise from point "T" can be classified as a bull market.
- See more details about Bull Market "T" in the public area, or in the Toolbox Member's Area.
- The index then fell 14% from point "U" to make a new Correction, then covered to the same highs at point "U2", then promptly fell 21% to point "V", heralding another "bear market". See details in the Toolbox Members Area.
See the latest version of this chart, and more details in the
Members Area of the
Share Market Toolbox.
Each line on the chart starts at "Week zero" and "0%". The chart shows how each bear market developed over time, with the price falling away week by week.
All these bear markets and corrections have fallen and then returned to make new highs.
Except for the latest bear market "S2" which at the time of preparing this material had not made a new (and sustained) High.
For example, the Correction labelled "K" fell away from the horizontal zero line in the first few weeks, then made new highs after about 33 odd weeks only to fall again to about 10% down before making sustained new highs after about 66 weeks.
Note that Bear Market "A" continued for so long that it runs off the edge of this chart.
Toolbox Members can
click on this chart
for a larger image.
for a larger image.
See more details in the
Members Area of the
Share Market Toolbox.
The chart at right shows that old bear market superimposed onto the more recent bear market. The time scale is the same on both. The two charts have been offset sideways so that the trough of each market coincides.
For lots more comment,
and the latest up-to-date details,
including some percentage amounts, and precise time counts,
see the Bear Markets analysis in the Toolbox Members' Area.
and the latest up-to-date details,
including some percentage amounts, and precise time counts,
see the Bear Markets analysis in the Toolbox Members' Area.
Toolbox Members can
click on the chart
at right for a larger image.
at right for a larger image.
See the latest up-to-date version of this chart in the
Toolbox Members Area.
| How is any of this useful? | |
| Firstly, whatever has happened in the market in the past is possible at any time, and could happen again. So we should not be surprised if our market was to take another tumble below the levels of early 2010. It did this in 1992 (falling 19% from recent highs) before the market recovered from the crash of 1989, and it could happen again. | Secondly, some people like to study "cycles" on charts. That is, they look for roughly constant repetitions. Things like the number of weeks from a Peak to a Trough, or a Peak to a Peak. And the numbers 44 and 90 and 144 are amongst a few popular numbers. It is a case of view a chart (with good software), and take some measurements, and look for patterns. |
Conclusions
Some possible conclusions include:- The market can move a long way very quickly; but once a bear market starts, it can run for several months.
- On a Weekly chart, a bear market bottom is often a "V" shape.
- A bear market does often form a "W" pattern on the chart.
- (more conclusions are listed in the Members Area).
More details
about Aussie Bull and Bear markets?
Aussie BULL Markets information is freely available in the public area.
More details about the Bear Markets and Corrections above is available from the Members Area of Brainy's Share Market Toolbox.