A lesson from history - the bear's not done yet

The recent stock market rally has had many people talking about the return of the bull market. But a look back at history can help us spot a bear market's end. And it hasn’t come yet.

Two weeks ago we reported that on Tuesday 10 March the Dow stormed ahead by 379 points, and a large consensus decided that the bear market was over and the next bull market was underway. Since then, on the back of Timothy Geithner's new initiative for dealing with the banks' legacy assets (they used to call them toxic assets) the American stock market has led the world even higher the Dow from its February low is up 22%.

World markets, including the FTSE, have naturally benefited; the FTSE has risen 16% from its February low - all very impressive. So today we have to ask ourselves again "Has a new bull market started?" A good place to start is to look at what other historic primary bear markets looked like when they ended; we study two charts and compare them to the current charts for the S&P 500 and FTSE.

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