The Dow Jones Industrial Average closed a little more than 20% below the all-time closing high and that is called a bear market signal in financial media. At the same time, many are focusing on the high speed of the decline. However, this is still nothing like 2008.
The daily S&P 500 chart below shows the rolling counts of returns lower than 4% in 120 days (RL4) and lower than -4% and larger than 4% in 120 days (RLG4.)
It may be seen that near the bottom of 2008 bear market, RL4 reached 20. At this point it is at 3 only.
Count RLG4 reached 34 also by the bottom of 2008 bear market. Now this count is at 6 only.
Therefore, to all those that think the speed of correction is sign of a very volatile market, I have a message: You probably ain’t seen nothing yet.”
Charting and backtesting program: Amibroker
Data provider: Norgate Data