2003 Bear Market Bottom

Here are two charts, comparing today's market to the bottom of the last bear market. There are a couple of characteristics from 2003 that we are starting to see now. We are a ways from the start of the next great bull market, but we are showing signs that the bottoming process may be under way.

The most important thing you will notice is the long term (150 day) moving average. It flattened out in 2003 before price was able to hold above it. Currently the 150 DMA is downward sloping and far above the current price. The next thing that was important was the occurrence of positive divergences (Divergences are where price makes a higher high or lower low, and an indicator fails to do so). During the bottoming process in 2003, there were positive divergences in the NYSE New Lows as well as the summation index. As the market made new lows, there a fewer amount of stocks that made new lows, and the summation index held above it's prior low. Today we are starting to see a divergence in the NYSE New Lows.


2003 Bear Market Bottom

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