The average correction that's happened after a
500% bull market run on the DJIA since 1929 has been 68%. Not counting 1929 to 1932 correction, the average has been 61%. The average number of years per correction from peak to trough was 6.5 years. So now that the DJIA went up around 475% from 2009 to 2022, will we get the 5 th huge correction of the last 100 years ? If we do, history says it'll likely be around 60% off the DJIA from peak to trough
Being that the DJIA was 36800 at it's height, taking 40% of that would bring it down to 14720. For the S&P, the high was 4790, so 40% of that would be 1916. Both numbers sound plausible to me. As far as the 6.5 years average for prior corrections, the 1966 to 1982 one should maybe be discounted, and if so, then the average for the other 3 were 3.3 years. That sounds more likely to me, but who knows.Either way, I believe there is a 50/50 chance that this will be the 5th major correction since 1929, and that a new bull market will happen at earliest by mid 2025.
