Bull Drawdown keeps only the setbacks that occur while an advance is established, recording how far each one fell from whatever peak was most recent at the time. Every shaded stripe stands for one complete advance.

Looking back over previous cycles, violent setbacks during an advance have been unremarkable rather than terminal. This exists to separate an ordinary wobble from a genuine turn, and it does that by comparison instead of by nominating a number.

What it actually measures

Only declines inside a confirmed advance are counted, measured from the local high they fell from. That filtering is the point: a correction inside a trend and a decline that ends one look identical in isolation and behave completely differently.

Stacking the advances alongside one another is what makes any of this readable. Whatever setback is under way can be set against the ones earlier advances shrugged off, sharing an axis instead of being judged against a price level.

Depth alone answers nothing, and comparison answers everything

A twenty-five per cent fall is meaningless as a number. Past bull markets have absorbed pullbacks of that size repeatedly and carried on, and other declines of the same depth were the start of the end.

What separates them is whether the pullback is in line with what this asset’s prior advances contained. It is a comparison against a distribution, not a level to be crossed, and it is easily the only reading this view offers. Anyone looking for a percentage that means danger will not find one here, because there is not one.

What it does not tell you

It only speaks inside a confirmed uptrend. The moment the regime is in question the view has nothing to compare against, which is precisely when people most want an answer from it.

The sample is also a handful of advances, each under different conditions. A pullback that is unusual against three prior bull markets is unusual against a very short record, and that is a weaker statement than it sounds.

Nor does it say anything about what caused a pullback. Two corrections of identical depth can come from a funding flush and from a genuine change in demand, and the view records them the same way. Depth is what it measures and cause is what it cannot see, which is worth holding in mind when a correction looks familiar.

How to read it

Healthy Correction. The everyday setbacks an established advance produces. Ground like this has generally held and the advance has carried on.

Regime Warning. Earlier advances shrugged off setbacks of about this size and kept going. Falling appreciably further has tended to mean the advance itself is finished.

The Market Cycles dashboard holds Bull Drawdown together with Bear Rallies, ATH Drawdown and Cycle Timeline.

Common questions

How does this differ from ATH Drawdown?

That one is judged against the highest price on record and nothing else. This keeps only the turbulence inside an established advance, taking each setback from whatever peak preceded it.

Does a deep pullback mean the advance is over?

Not by itself. Violent setbacks during an advance have been unremarkable across previous cycles, and the question is whether this one is the size earlier advances shrugged off.

What are the shaded stripes?

A stripe for each advance, which lets whichever one is running be set against the finished ones on a shared axis instead of against a price level.

Is there a percentage that means danger?

No, and looking for one misses the point. The reading is a comparison against what earlier advances contained, not a level.

When is the view least useful?

Exactly when the regime is in doubt. It compares pullbacks inside a confirmed uptrend, so an unconfirmed one leaves it with nothing to say.