Today’s Chart of the Day was shared by Nick Reece (@nicholastreece). Billionaire trader, Paul Tudor Jones once famously said; "There is no training, classroom or otherwise, that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market." Nick gives us a more empirical representation of what PTJ was talking about. Looking at all of the bear markets in the S&P 500 since 1929, he notes that the final third was the most painful 11 out of 16 times, or 69% of the time. The average decline in the final third is double that of the first or second third, and about equal to the first two-thirds combined. It's impossible to tell which third we're currently in, but this makes sense given that bear markets often end with capitulation. Have we seen the final puke yet?
Chart of the Day - Wednesday, August 31st, 2022
August 31, 2022
