Chart of the Day - Wednesday, August 31st, 2022

Today’s Chart of the Day was shared by Nick Reece (@nicholastreece). Billionaire trader, Paul Tudor Jones once famously said; "There is no training, classroom or otherwise, that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market." Nick gives us a more empirical representation of what PTJ was talking about. Looking at all of the bear markets in the S&P 500 since 1929, he notes that the final third was the most painful 11 out of 16 times, or 69% of the time. The average decline in the final third is double that of the first or second third, and about equal to the first two-thirds combined. It's impossible to tell which third we're currently in, but this makes sense given that bear markets often end with capitulation. Have we seen the final puke yet?