Bear Rallies follows the upward bursts that break out while a decline is established, recording how far each one climbed from the low it began at. It exists because bursts like these get read as the end of the decline with tedious regularity.

Climbs of thirty or fifty per cent are perfectly routine inside a long decline and settle nothing about whether the cycle has turned. Knowing that before one arrives is where most of the value here sits.

What it actually measures

Every burst is judged from the low it set off from, and that is what allows one to be set against the next and against those earlier declines threw up. Judging from the peak instead would describe the fall rather than the burst.

Laying them together gives a range. The reading is whether the current bounce sits inside the range this bear market has already produced, or beyond everything it has managed so far.

It cannot call a bottom, and that is the design

Every view on a cycles dashboard is asked at some point to identify the turn, and this one refuses. It reports the size of bounce a downtrend can produce without ending, which is a different question and a far more answerable one.

That refusal is what makes it useful. A tool that told you every large rally was the bottom would be wrong most of the time, because most large rallies inside a bear market are not. This one gives you the context that stops a normal bounce being read as a reversal, and it leaves the call to you.

What it does not tell you

A bounce beyond everything the downtrend has produced is evidence and not confirmation. It is the first thing that would be true if the trend had turned, and it is also true of the largest bear rally in any bear market that carried on.

It also depends on the downtrend being confirmed. That classification is made with hindsight at the edges, so the most recent readings are the least settled ones on the chart.

And a bounce that stays inside the range is not evidence the downtrend continues. It is simply uninformative, which is a different thing and easy to mistake for a bearish reading.

How to read it

Bull Trap. A forceful climb breaking out mid-decline. These get read as the end of the fall right up until the fall resumes.

Possible Regime Change. A climb appreciably bigger than anything this decline has thrown up so far. That is the first hint the fall may be finished, and a hint is all it is.

Bear Rallies is kept on the Market Cycles dashboard, in company with Bull Drawdown, Cycle Downside and Cycle Timeline.

Common questions

What counts as a bear market rally here?

How far each upward burst climbed from the low it set off from, while a decline was established. What it demonstrates is that forceful climbs are routine inside long falls.

How do I separate a genuine turn from a bounce?

Not from here by itself, and deliberately so. What it supplies is the scale of climb a decline can throw up while still having further to fall, which is the context that stops the error.

Why measure from the trough rather than the peak?

Because the thing being measured goes upwards. Judging from the low it set off from is what lets one burst be set against the next and against those earlier declines produced.

What does a record-sized bounce mean?

It is the first evidence the downtrend may be over. It is also true of the largest rally in every bear market that then continued.

Why are recent readings less reliable?

Because whether a downtrend is confirmed is settled with hindsight at the edges, so the newest part of the chart is the least settled.