2008 Bear Market vs 2020 Bear Market

I created a video, where I backtested the Bear market of 2008 on Nifty50 Charts.

Here is the link[ https://youtu.be/fePDnA4flVA]

The purpose of this video is not to replicate or imply whatever happened in the 2008 bear market would exactly happen in Today's 2020 Bear market, but to find out the basic characteristics which any Bear Market can possess. 

Elaborate Summary of 2008 Bear Market

2008 Bear Market had 3 Impulse Declines, and 3 advances, details of which are as follows:-

• 1st Decline was approx 30% and was the sharpest with no legs, followed by the sharp counter Rally which was approx 25% and of 3 legs (ABC)
• 2nd Decline was approx 31.65 % and was shallow with many legs, followed by the 2nd counter-rally of approx 23% and this time also rally was sharp and has got 3 legs (ABC).
• 3rd Decline was approx 51.55 % and it was sharp with few shallow recoveries followed by the sharpest rally of approx 43.85% and was the sharpest among all and then the prices went sideways for some time, and finally break to the upside and that marked the end of 2008 Bear Market.

Conclusion :

• The First and Second decline was of the same size, but the momentum in the first decline was high, with no recoveries.
• The Last decline was greater than the previous two declines and momentum was also high but it has got few shallow recoveries.
• The First and the last Decline of the Bear Markets were the sharpest ones [ Note - The first decline had no up days, while the last decline had few up days ].
• The First and Second counter-rallies had three legs and some down days, however, the last rally was straight up with no down days.
• The Counter Rallies was of a minimum of 20 -25 %.
• First and Second decline had some rhythm which was broken in the third decline, so I calculated the third counter-rally % based on the first and second counter-rallies i.e when the market declines for 30% from its high its recovers 25% from its lows, so how much recovery should come if it declines for 51%, for the bear market to continue, and that comes approx 42%.
• The Market broke that rhythm again when it breaks that 42% Cap on the upside and started rallying beyond that and that marked the ending of the 2008 Bear Market and the happy beginning of the new bull market.

Hope this article clears out the fuss that I am not trying to replicate the things happened in 2008 Bear Market, because every bear market is different and history does not repeat itself, it only rhymes and am only trying to find out the rhythm and the price action key points that we can look out for in this 2020 Bear Market.