Bear Market Rallies

I took a look at 4 of the major bear market rallies from 2000-2003 to get an idea of their magnitude. Their returns from trough to peak were 22%, 27%, 26%, and 25% respectively.

This bear market hasn't had too many rallies. There was one notable one from 11/20/08 - 01/05/09 which returned 24%. This current rally (started last Friday) is already up 13%.
A 25% rally would get us to SPY 83.

Obviously we could rally 14% or 41% but it's good to have an idea of what is 'normal' - not that anything of the past 18 months has been normal. I would expect some profit taking before the weekend and I will start to establish short positions in stocks with heavy overhead resistance (there's no shortage of them) when SPY gets to 79 - 83
SPY


If/When SRS gets down to 48 I will start buying. And I won't stop until it becomes profitable.