A Depressing Look At The Australian Bear Market

Note from dshort: After posting my weekend update of the eight world markets I track, I took a quick look at Australia’s All Ordinaries Index to see how it has been faring since my last All Ords post on September 7th. The index fell 5.94% last week and crossed below the 20% decline benchmark for a cyclical bear market on Thursday. The All Ords is currently 21.4% below its interim high, set on April 11th.

What would the S&P 500 look like without the Tech Bubble? Perhaps something resembling Australia’s All Ordinaries Index. I’ve included the S&P 500 in the background to support the idea.

 

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I’m not a technical analyst, but the twin peaks in the S&P 500 over the last dozen years looks like a double top. On a smaller scale the shape of the All Ords since the 2009 trough also has a bit of “twin-peaks” appearance.

There are some who might view the All Ordinaries dramatic 56-month rise to the 2007 peak as a bubble. While the All Ords may indeed have become frothy, it’s no match for a couple of widely acknowledged historic bubbles.

 

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Footnote: Why the linear regression in the top chart? I included it merely to give a sense of what a mathematically precise line through the daily closes would look like. The regression divides the closes so that they are, in simple terms, evenly divided above and below the line.

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