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 path that is fairly similar to that of the Nasdaq rally that began in late 2002 as well as the Dow rally that began in 1942. It is worth noting that after 300 (plus or minus) trading days the market moved into a trading range/choppy phase that lasted for a year or more.

Dennis Gartman Comment: We find ourselves less and less enthusiastic about stock prices and we find ourselves more and more concerned about them for as we look at one broad market index after another we come away with the thought that a major top has been formed, globally and domestically, and this we find disconcerting. For a Trial Subscription go to The Gartman Letter

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