Below is a chart I constructed a few years ago of the 2007-2009 Bear Market as it played out with the SP500 Index. The wave structure is based on Elliott Wave Theory.
This is just a real life example of how the previous major bear market played out.
As of this past week we may now have entered a major stock market correction.
Whether we have or have not will unfold in the coming weeks and months.
This chart illustrates the internal up and down legs of a major bear market in equity markets.
If we are currently entering a major bear market, it need not follow the timeline and percentages of the 2007-2009 bear market. The US Federal Reserve and HFT (High Frequency Trading driven by very smart computer trading algorithms) has really upset and disturbed the natural rhythms of stock markets and their relationship to economic cycles.
Posted at original size.