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Chart of the Day - Market Corrections

The stock market dropped sharply today and investors remain concerned. For some perspective on the current correction, today's chart illustrates all major stock market corrections (15% loss or greater) of the last 108 years. Each dot represents a major correction as measured by the Dow. For example, the bear market that began in 1973 lasted 481 trading days and ended after the Dow declined 45%. There are a few items of interest... Since 1900, the Dow has undergone a major correction 26 times or one major correction every 4.2 years. Second, most major corrections since 1900 (64%) have resulted in a drop of less than 40% while lasting less than 400 trading days. Since 1950, the percentage of major market corrections that were less than 40% and 400 trading days increased to 84%. As it stands right now, the current stock market correction (October 2007 peak to most recent low) would measure slightly below average in both magnitude and duration.



http://www.chartoftheday.com