To: Oblomov who wrote (114309 ) 7/24/2001 7:13:33 PM From: pater tenebrarum Respond to well, broadly speaking, i'd characterize it as the first cyclical bear market within the context of a longer term secular deflationary bear market. and within this cyclical bear, i believe it's phase 2 - phase 1 being the initial downleg that occurs long before anyone suspects a downturn in the real economy looms, taking care of the worst speculative froth. phase two being the one where the reality of the downturn is already known, and the barrage of worsening fundamentals weighs on stocks. the third and last phase would be the capitulation - the period when pessimism becomes as excessive as optimism was at the top, and people, instead of eagerly picking bottoms, simply give up. however, a secular bear usually contains more than just one cyclical bear market. look at Japan...THAT'S what a secular bear after a bubble looks like...it contains several cyclical bull and bear markets, with the bears reaching successively lower lows (that's not always the case though - the '29 to '49 secular bear in the US reached its lowest low relatively early on, and the '66 to '82 one reached it after about 2/3rds of the way. however, the latter case had its inflation adjusted low really in '82, right at the end). usually the end of the secular bear is also when pessimism reaches a peak, regardless of whether the nominal price low is a higher or lower low.
