Since the market “bottomed” on July 15th, we have seen a tremendous rally in all major sectors outside of materials and energy. But is this the end of a bear market or just a big short squeeze?

To answer this question we can look at historical bear market duration and price declines, and a technical picture of the market.

Historical Statistics
Historically, the average bear market has been about 305 days and a price decline of 35 percent; currently have not reached either of these levels. The historical information would suggest we have at least seen the majority of the price decline and duration.

If the market continues to rally this bear market would be the third shortest since 1900. Is anyone willing to take that bet?

Technical Snapshot
I am going to use two of the more popular and accurate technical metrics to interpret market price data, support/resistance and moving averages.

Our lows in January and March produced a line of support, at the 11,750 level. After breaking this level in late June, the market is attempting to test this new resistance level. Currently, the market is still 6% below its 200 day moving average and the average is sloping down, a signal of long term trend.

The technical picture is illustrates that we are still in a bear market. For this market to true be considered “buyable”, many technicians would want to see at least 12,500 on the Dow30.

Conclusion

History is telling us that we probably have another month or two and 8-10 percent on the downside. While we have probably have seen most of the decline, the charts are not looking too bullish. My opinion is not to get carried away. We have seen substantial moves in market indices since July 15th and it would be very difficult to continue this rate of change.