Next in our series on the price-volume relationship in our Four Bad Bears lineup is the 2000-2002 Tech Crash. Like the Oil Crisis bear, the S&P 500 lost nearly half its value — this time over a 31-month period.
Next in our series on the price-volume relationship in our Four Bad Bears lineup is the 2000-2002 Tech Crash. Like the Oil Crisis bear, the S&P 500 lost nearly half its value — this time over a 31-month period.
As we've seen, the 1929 Dow Crash had a clear pattern of decreasing capitulation volume spikes with seller exhaustion (an absence of volume) at the bottom. In contrast, volume throughout the 1973-1974 Oil Crisis was rather unremarkable. The price-volume relationship in the Tech Crash fits somewhere in between.
This bear market saw an increase in capitulation volume from the 2001 low to the major capitulation that came 10 months later. This new low was the first of the triple bottoms in the 7.6-month bottoming process. The true bottom in October 2002 came with lower volume. Volume on the successful retest in March 2003 was even lower.
At some point over the weekend, I'll consolidate our volume analysis of the Four Bad Bears into a single chart series for easier comparison.
