by John Lounsbury
On August 12 we posted a report on 30 global markets after the early August swoon. At that time there were two markets in a pullback of less than 10%, thirteen markets in a correction (down 10% but less than 20%) and fifteen markets officially bears with declines of 20 % or more. We said that we would revisit this data if it deteriorated further. After market closes today (September 9, 2011) twelve of the thirty have established new lows for 2011 that have occurred since August 12.Let’s review the terminology:
We will use the definitions that a decline less than 10% is a “pullback”, a decline of 10% but less than 20% is a “correction” and a decline of 20% or more is a bear market. Note: this author has also used the alternative definitions of “pullback” and “correction” interchangeably, “secondary bear market” rather than correction and “primary bear market” for declines of 20% or more.
The following table shows the new data:
The same two markets are still in the pullback category on August 11. There are now four less markets in correction (now nine). Unfortunately that does not represent improvement – the four moved into the bear market classification.
The remaining eight new lows are divided: three are deeper in correction and five are deeper into bear markets.
The Americas is the strongest geographic region with only the U.S. Transportation index and the Argentina index in bear market territory. The Asia/Pacific region has the greatest diversity with two pullbacks, two corrections and eight bears. The European region is the deepest in the hole with one correction and nine bears.
The ten worst performing bears are seven European markets, two Asia/Pacific and one in the Americas.
We will report again if there is further market deterioration.
Ranking a World of Red Ink by John Lounsbury