Simple analysis of Bull & Bear months

Bulls and Bears KLCI
		High	Date	Low	Date	Chg	Chg %	Duration (months)
Bears	1	540.33	30/8/81	220.74	12/8/82	(319.59)	-59.1%	11
	2	426.79	8/2/84	169.83	2/5/86	(256.96)	-60.2%	15
	3	470.16	10/8/87	223.12	7/12/87	(247.04)	-52.5%	4
	4	632.22	1/8/90	459.08	28/9/90	(173.14)	-27.4%	2
	5	635.02	29/5/91	505.47	19/8/91	(129.55)	-20.4%	2.5
	6	1,314.46	5/1/94	840.87	24/1/95	(473.59)	-36.0%	13
	7	1,085.04	5/6/95	883.96	14/11/95	(201.08)	-18.5%	6
	8	1,271.57	25/2/97	262.70	1/9/98	(1,008.87)	-79.3%	18
	9	1,013.27	18/2/00	553.34	9/4/01	(459.93)	-45.4%	13.5
	10	808.07	23/4/02	616.46	3/12/02	(191.61)	-23.7%	7
	11	1,516.22	11/1/08	829.41	29/10/2008	(686.81)	-45.3%	10
					Simple Avg	(377.11)	-42.5%	9.3
					Avg (ex-1990)			10
		Low	Date	High	Date	Chg	Chg %	Duration (months)
Bulls	1	220.74	12/8/82	426.79	8/2/84	206.05	93.3%	18
	2	169.83	2/5/86	470.16	10/8/87	300.33	176.8%	15
	3	223.12	7/12/87	632.22	1/8/90	409.10	183.4%	32
	4	459.08	28/9/90	635.02	29/5/91	175.94	38.3%	8
	5	505.47	19/8/91	1,314.46	5/1/94	808.99	160.0%	28
	6	840.87	24/1/95	1,085.04	5/6/95	244.17	29.0%	5
	7	883.96	14/11/95	1,271.57	25/2/97	387.61	43.8%	16
	8	262.70	1/9/98	1,013.27	18/2/00	750.57	285.7%	17
	9	553.34	9/4/01	808.07	23/4/02	254.73	46.0%	13
	10	616.46	3/12/02	1,516.22	11/1/08	899.76	146.0%	61
	11	829.41	29/10/08	1,594.74	8/7/11	765.33	92.3%	32
					simple avg	443.73	120.3%	22.3
					Avg (ex 95 and 02)			19.9
Current Scenario
		High	Date	Current	Date	Chg	Chg %	Duration
		1594.74	8/7/11	1,387.81	22/9/2011	-206.93	-13.0%	2

As can be seen, our Bear market lasts an average of 10 months with an average decline of 43% with the previous 2008 decline falling 45% from peak to trough. Assuming a similar decline this time round, CI is potentially looking at 920 points. Before one falls off the chair, let me remind that this is a very simplistic way of looking at the downside. Other factors that need to be accounted for include economic conditions and more importantly, the intensity of the fall. We are in fact “happy” to note that the recent sell down is significant which could help the bearish condition end sooner rather than later.

Besides the bear markets during 87, 90 and 91 which had fallen an average rate of 8% - 13.7% per month, normal bears that KL had experienced usually drop at a rate of 3%-4% per month. At the current moment, we are averaging some 6.5% per month (we have dropped 13% from peak within a mere 2 months). While it sounds bad but it does help bear markets end sooner rather than letting it drag.

Above Information from ECMLibra.

REI : The above is an interesting data,  my take will be 2 scenerio
Scenerio 1: Taking an average data of 10 months of bear, then there will be another 8 months of bear to go before we see any bottoms till May2012.
Scenerio 2: Then again, if the rate is 13% for 2 months and KLCI is to decline say 42.5%, there will be rough another 5 months to go, by then will be around Mar2012.
So, either one, no long term play (except dollar cost averaging strategy) but we can still punt for sharp drop rebounds . Haha, this is for those itch finger type and punting is punting , it will not lead to financial freedom, so only can play small small, like the saying goes, drink a mug of beer everyday is good for you health but if more than that will be quite bad for your health.